; 


RUSSELL    SAGE 

FOUNDATION 


THE    CHATTEL 
LOAN  BUSINESS 

A  REPORT 

PREPARED  UNDER  THE  DIRECTION  OF 
THE  BUREAU  OF  SOCIAL  RESEARCH, 
NEW  YORK  SCHOOL  OF  PHILANTHROPY 

BY 

ARTHUR   H.   HAM 


NEW     YORK 
CHARITIES    PUBLICATION 
COMMITTEE       ...       MCMIX 


LIBRARY 


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RUSSELL    SAGE 
FOUNDATION 


THE    CHATTEL 
LOAN  BUSINESS 

A  REPORT 

PREPARED  UNDER  THE  DIRECTION  OF 
THE  BUREAU  OF  SOCIAL  RESEARCH, 
NEW  YORK  SCHOOL  OF  PHILANTHROPY 

BY 

ARTHUR   H.   HAM 


NEW     YORK 
CHARITIES    PUBLICATION 
COMMITTEE       ...       MCMIX 


Copyright,  1909 

By  the  Charity   Organization  Society 

of  the  City  of  New  York 


TABLE  OF  CONTENTS. 
INTRODUCTION. 


CHAPTER  I. 
The  Need.  io 


CHAPTER  II. 

The  Law.  12 

CHAPTER  III. 
Methods  of  Business.  17 


CHAPTER  IV. 
Experiences  in  Philadelphia.  24 


CHAPTER  V. 
What  the  Philanthropic  Companies  Are  Doing.       34 


APPENDICES. 


PAGE 

Appendix  I.     The  New  York  Law 40 

Appendix  II.     Provision  of  the  Penal  Code  of  New  York.  .  44 

Appendix  III.     The  Business  Corporation  Law  of  New  York  45 

Appendix  IV.     The  Maryland  Law 46 

Appendix  V.     The  New  Jersey  Law 48 

Appendix  VI.  List  of  the  More  Important  Chattel  Mort- 
gage Loan  Companies  Operating  in  New  York  City 51 

Appendix  VII.  Financial  Statements  of  the  Chattel  Loan 
Association  of  Baltimore  City 52 

Appendix  VIII.  Report  of  the  Treasurer  of  the  St.  Bar- 
tholomew's Loan  Association  of  New  York  for  the  Year 
Ending  October  31,  1907 55 

Appendix  IX.  Financial  Statement  of  the  Citizens'  Mort- 
gage Loan  Company  of  Cincinnati,  December  31,  1907.  ...     57 

Appendix  X.  Report  of  the  Working-men's  Loan  Associa- 
tion of  Boston,  March  31,  1908 59 


INTRODUCTION. 

Last  year  the  Bureau  of  Social  Research  issued  a  report  on 
the  salary  loan  business  in  New  York  City.*  The  present  report 
on  the  chattel  loan  business  is  a  logical  complement  of  the  earlier 
one.  Together  they  form  part  of  a  larger  scheme  of  investiga- 
tion including  the  study  of  various  agencies  and  practices  that 
seem  to  exploit  the  necessities  of  the  ignorant  or  helpless. 

Among  the  conclusions  reached  in  the  salary  loan  investiga- 
tion emphasis  was  laid  on  the  one  hand  upon  the  need  among 
wage  earners  for  temporary  aid  to  tide  over  emergencies,  and  on 
the  other  upon  the  distressful  consequences  frequently  caused  by 
borrowing  from  existing  salary  loan  agencies.  With  the  chattel 
loan  companies  severe  and  often  unscrupulous  business  methods 
produce  like  distressing  results  among  borrowers,  who,  in  an  even 
larger  proportion  of  cases  than  those  obtaining  loans  on  assign- 
ment of  wages,  are  steady,  reliable,  hard  pressed  men  in  need  of 
temporary  assistance. 

The  large  problem  then  in  this  connection,  is  to  afford  loan 
facilities  which  will  meet  the  need  of  wage-earners  in  financial 
straits  in  a  way  that  will  obviate  the  regularly  burdensome  and 
often  dire  effects  of  an  appeal  to  existing  agencies  of  the  purely 
commercial  type.  A  comprehensive  remedy  by  legislation  alone 
seems  to  be  unobtainable.  Laws  have  been  framed  to  meet 
changing  conditions,  but  they  have  thus  far  failed  to  obviate  pre- 
vailing difficulties.  The  founders  of  the  Citizens'  Mortgage 
Loan  Company  of  Cincinnati,  after  investigating  the  chattel  loan 
situation  in  that  city,  were  convinced  that  it  would  be  futile  to 
attempt  to  eradicate  oppressive  features  by  restrictive  or  repress- 

*C.  W.  Wassam :  The  Salary  Loan  Business  in  New  York  City.  Russell 
Sage  Foundation  Publication,  1908. 


5  CHATTEL  LOAN  BUSINESS. 

ive  legislation.  They  adopted  philanthropic  competition  as  the 
most  practicable  remedy.  In  1900  the  legislature  of  Maryland, 
on  the  initiative  of  the  Chattel  Loan  Association  of  Baltimore, 
enacted  a  law  which  it  was  thought  would  meet  the  requirements 
of  effective  legislation ;  but  the  loan  companies  had  little  difficulty 
in  evading  its  provisions.  In  1902,  the  law  that  is  at  present  in 
force  in  Maryland  was  enacted.  It  has  been  an  improvement  on 
the  earlier  law,  but  usurious  practices  continue  to  flourish.  The 
manager  of  the  Baltimore  company  has  come  to  the  view  that 
restrictive  legislation  can  do  little  so  long  as  borrowers  are  will- 
ing to  pay  high  charges,  and  that  the  most  reliable  remedy  lies 
in  extended  philanthropic  competition. 

The  present  laws  of  the  State  of  New  York  seem  sufficiently 
explicit.  They  open  the  way,  on  the  one  hand,  for  charges 
aggregating  24  per  cent  per  annum  to  chattel  loan  concerns 
which  will  place  themselves  under  the  supervision  of  the  state 
banking  department ;  and  on  the  other  hand  the  law  prohibits,  to 
concerns  which  do  not  incorporate  and  place  themselves  under 
supervision,  a  higher  charge  than  6  per  cent  per  annum  under 
penalty  of  criminal  prosecution  and  forfeiture  of  principal  and 
interest  for  usurious  practices.  But  the  money  lenders  are 
having  little  difficulty  in  evading  the  law  by  devices  that  make 
proof  of  usury  almost  impossible. 

In  general,  experience  would  suggest  the  conclusion  that  any 
attempt  to  keep  loan  companies  within  bounds  merely  by  adding 
to  the  list  of  restrictive  measures  under  which  they  may  operate, 
simply  results  in  higher  charges  and  more  irresponsible  prac- 
tices. Newspaper  publicity,  setting  forth  the  experiences  of 
unfortunate  borrowers,  apart  from  a  program  of  action,  is  like- 
wise unavailing,  for  such  accounts  are  soon  forgotten  and  un- 
scrupulous practices  go  on  without  abatement. 

At  present  in  New  York  City  there  is  only  one  agency  with 
limited  capital  to  which  a  needy  man  can  be  referred  with  the 
assurance  of  being  charged  a  reasonable  rate  on  a  chattel  mort- 
gage loan.  No  such  agency  exists  in  the  salary  loan  field,  and 
none  can  exist  so  long  as  it  is  impossible  to  charge  more  than  6 
per  cent  per  annum  on  salary  loans.     With  this  situation  in  mind, 


INTRODUCTION.  9 

the  next  step  would  seem  to  be  one  combining  legislation  with  phil- 
anthropic competition.  The  work  so  well  begun  by  the  St.  Bar- 
tholomew's Loan  Association  might  well  be  extended  at 
once  in  such  manner  as  not  only  to  meet  in  a  more  adequate  way 
the  growing  demand  for  loans  on  chattel  security,  but  ultimately 
as  well  to  make  an  experiment  in  the  salary  loan  field,  thus  far 
unexplored  by  philanthropic  enterprise.  Meanwhile,  existing 
laws  might  well  be  amended  so  as  to  legalize  the  charging  of 
reasonable  rates  on  salary  loans,  at  the  same  time  subjecting 
both  salary  and  chattel  loan  concerns  to  such  regulative  super- 
vision as  will  keep  pace  with  the  changing  devices  of  the  money 
lenders.  The  main  remedy  must  be  sought  in  competition,  and 
that  perhaps  in  the  chattel  loan  rather  than  in  the  salary  loan 
field ;  but  legislation  can  make  an  effective  contribution  if  for 
merely  repressive  measures  it  will  substitute  discretionary  action 
based  on  contemporary  knowledge. 

The  results  here  published  are  in  large  part  the  outcome  of 
the  work  of  Mr.  Arthur  H.  Ham,  who  has  spent  the  past  three 
months  in  making  an  investigation  of  the  chattel  loan  situation. 
Mr.  Ham  has  drawn  freely,  however,  on  material  gathered  in- 
cidentally by  Mr.  C.  W.  Wassam  in  his  salary  loan  study,  as  well 
as  on  special  reports  prepared  by  Mr.  Frank  J.  Warne  and  Mr. 
W.  F.  Finley.  The  Bureau  is  indebted  to  these  gentlemen  for 
help  received  in  this  direction,  as  well  as  to  Mr.  Frank  Tucker, 
Vice-President  of  the  Provident  Loan  Society,  whose  advice  "and 
aid  have  been  a  constant  source  of  reliance. 

Roswell  C.  McCrea, 
Associate  Director  (in  charge  of  the  Bureau  of  Social  Research), 

Samuel  McCune  Lindsay, 

Director. 


THE  NEED. 

An  emergency  in  the  economy  of  the  wage-worker  whose 
earnings  range  below  $100  a  month  cannot  be  met  through  the 
fiscal  agencies  that  satisfy  the  similar  demands  of  men  of  larger 
income.  His  only  recourse,  in  lack  of  willing  friends  or  of  others 
charitably  inclined,  is  to  one  of  a  group  of  the  following  agencies  : 
the  pawn  broker,  the  salary  loan  company  or  the  broker  in  chattel 
mortgages.  Of  these  the  first  is  very  often  closed  as  an  avenue 
of  assistance,  owing  to  the  lack  of  suitable  property  to  be  pledged 
by  the  would-be  borrower  of  small  means.  His  choice  is  conse- 
quently restricted  to  those  brokers  who  charge  high  rates  of 
interest  and  take  as  security  mortgages  upon  furniture  or  assign- 
ments of  wages.  Of  these  two  forms  of  loan,  by  far  the  more 
oppressive  in  the  obligations  it  imposes  and  in  the  effects  it  pro- 
duces is  the  salary  loan.  The  borrower  is  seldom  able  to  defend 
himself  if  steps  are  taken  by  the  broker  to  stop  his  wages.  Upon 
the  filing  of  an  assignment  his  earnings  are  summarily  cut  off 
and  his  position  lost.  If  he  secures  work  in  another  establish- 
ment he  is  followed  and  again  he  finds  his  pay  stopped  by  the 
aggressive  broker.  As  Dr.  Wassam  shows  in  his  account  of  the 
salary  loan  business  (a)  in  New  York  City,  the  borrower  who 
assigns  his  salary  as  security  for  a  loan  has  little  protection  in 
the  law,  for  by  the  amendment  of  1904  to  the  Penal  Code  it  is 
impossible  to  criminally  prosecute  those  persons  who  charge 
usurious  rates  upon  wages  assigned,  and  the  provision  of  law 
requiring  the  notification  of  the  employer  within  three  days  after 
an  assignment  of  the  wages  of  an  employee  is  systematically  evad- 
es C.  W.  Wassam :  The  Salary  Loan  Business  in  New  York  City.  Russell 
Sage  Foundation  Publication,  1908. 


THE  NEED.  II 

ed  by  requiring  the  borrower  to  sign  a  power  of  attorney  when 
taking  out  a  loan.  This  scheme  renders  the  law  of  1904  of  no 
effect.  Added  to  this,  the  general  feeling  of  distrust  engendered 
among  employers  has  resulted  in  a  very  general  refusal  on  their 
part  to  side  with  employees  in  an  endeavor  to  defeat  the  claims 
presented  by  the  loan  brokers. 

This  branch  of  the  loan  business  has  been  well  described  by 
Dr.  Wassam,  and  has  been  the  subject  of  frequent  comment  by 
the  daily  newspapers.  That  phase  of  the  subject,  however,  which 
has  to  do  with  loans  on  chattel  mortgage  security  is  at  present 
little  understood,  and  it  is  for  the  purpose  of  showing  the  condi- 
tions under  which  the  chattel  loan  business  thrives  in  New  York 
City  that  this  account  has  been  written. 

It  is  generally  supposed  that  while  borrowers  on  security 
of  wages  have  little  hope  of  protection  at  law,  borrowers  on 
household  furniture  are  well  protected.  At  first  glance  the  law 
would  seem  to  afford  adequate  protection  to  the  borrower  and 
allow  the  lender  no  opportunity  to  exact  more  than  the  legal 
rate  of  interest.  But  the  result  of  a  careful  examination  of  the 
law  and  a  thorough  investigation  of  the  business  methods  of 
mortgage  loan  companies  proves  it  to  be  extremely  doubtful 
whether  the  money  lender  can  be  criminally  prosecuted ;  and  so 
far  as  civil  action  is  concerned,  he  is  able  as  a  rule  to  demand 
illegally  high  rates  by  reason  of  the  many  devices  employed  for 
evading  the  laws  and  for  covering  up  the  usurious  nature  of  the 
contract. 


II. 

THE  LAW. 

Chapter  326  of  the  New  York  laws  of  1895,  popularly  known 
as  the  "Pawnbrokers'  Act,"  provided  for  the  incorporation  of 
associations  for  loaning  money  on  personal  property  in  any 
county  of  New  York  State  having  a  population  of  more  than 
300,000  and  less  than  600,000  inhabitants.  Under  this  act,  any 
three  or  more  persons  in  such  county  might  become  a  corporation 
of  this  sort,  loaning  money  upon  pledge  or  mortgage  of  personal 
property,  by  filing  a  certificate  in  the  form  prescribed  by  the 
Business  Corporation  Law  (a)  and  a  bond  equal  to  one-tenth  of 
its  capital  stock,  but  in  no  case  less  than  $5,000,  with  the  Super- 
intendent of  Banks.  Upon  his  approval,  such  corporation  was 
empowered  to  loan  money  on  security  described  at  a  rate  not 
exceeding  3  per  cent  per  month  for  a  period  of  two  months  or 
less,  and  not  exceeding  2  per  cent  per  month  for  a  longer  period ; 
also  a  sum  not  exceeding  $3.00  for  first  examination  of  security 
and  for  drawing  necessary  papers.  No  loan  was  to  be  made 
for  an  amount  greater  than  $200  to  any  one  person.  The  divi- 
dends of  such  a  corporation  were  limited  to  10  per  cent  yearly, 
and  after  a  surplus  of  50  per  cent  of  capital  had  accumulated, 
the  Superintendent  of  Banks  had  power  to  reduce  the  rate  of 
interest  if  he  were  satisfied  that  such  a  corporation  was  making 
a  profit  of  more  than  10  per  cent  yearly.  No  person  or  corpora- 
tion engaged  in  the  money  loaning  business  on  similar  security, 
except  those  incorporated  under  above  act,  could  charge  more 
than  6  per  cent  per  annum  under  any  device  or  pretext;  and  the 
violation  of  this  restriction  was  made  a  misdemeanor.  Upon 
proof  of  such  fact  the  debt  was  to  be  cancelled  and  security  made 

(•)    Appendix  III,  page  45. 


THE  LAW.  13 

void.  The  first  section  of  the  foregoing  act  was  amended  by 
Chapter  706,  laws  of  1895,  so  as  to  apply  to  all  counties  having 
a  population  of  more  than  300,000.  It  was  further  amended  by 
Chapter  206,  laws  of  1896,  to  apply  to  all  counties  containing  a 
city  of  more  than  25,000,  except  the  counties  of  Monroe  and 
Westchester.  Why  these  two  counties  should  have  been  except- 
ed is  not  clear;  it  was  doubtless  due  to  local  conditions  which 
the  members  from  these  counties  thought  sufficient  to  justify  ex- 
emption. Chapter  78  of  the  laws  of  1902  amended  all  sections  of 
the  first  act.  It  now  applied  to  all  counties  of  the  state  contain- 
ing or  contained  in  a  city  of  more  than  25,000  inhabitants,  except 
the  counties  of  Monroe  and  Westchester.  The  number  of  incor- 
porators was  changed  from  three  to  five  and  the  form  of  incor- 
poration slightly  altered.  The  Superintendent  of  Banks  by  this 
act  was  empowered  to  grant  licenses  to  all  corporations  fulfilling 
the  requirements  of  the  law,  and  these  licenses  as  well  as  the 
required  bonds  were  to  be  renewed  each  year.  An  annual  report 
verified  by  the  oath  of  the  president  or  secretary  of  a  company 
was  required  and  provision  made  for  inspection  of  a  company's 
books  at  least  once  a  year,  with  the  further  provision  that  the 
expenses  of  such  examination  should  be  borne  by  the  company. 
The  interest  allowed  was  reduced  to  the  uniform  rate  of  2  per 
cent  per  month  and  the  charge  for  papers,  etc.,  reduced  to  $2.00 
on  loans  of  more  than  $50  and  $1.00  on  loans  of  $50  or  less. 
Except  in  New  York  City  no  such  corporation  was  allowed  to 
make  loans  in  any  other  county  than  that  in  which  its  principal 
business  office  was  located.  The  last  section  slightly  altered  the 
corresponding  section  of  the  law  of  1895,  by  substituting  the  words 
"legal  rate''  for  the  words  "6  per  cent  per  annum,"  as  they  ap- 
peared in  the  first  law.  This  was  in  connection  with  the  pro- 
hibition of  a  higher  charge  by  companies  not  incorporated  under 
this  law.  A  further  amendment  appears  in  Chapter  333  of  the 
laws  of  1905.  This  makes  the  act  apply  to  any  county  contain- 
ing or  contained  in  an  incorporated  city,  except  the  counties  of 
Westchester  and  Monroe.  In  all  other  particulars  the  law  of  1902 
stands  as  the  present  law.  (a)     Corporations  organized  under  this 

(*)    Appendix  I,  page  40. 


14  CHATTEL  LOAN  BUSINESS. 

law  may,  as  previously  stated,  charge  2  per  cent  per  month  and 
$2.00  for  papers  on  loans  of  more  than  $50  or  $1.00  on  loans  of 
$50  or  less.  Any  charge  in  excess  of  this  involves  forfeiture'  of 
the  $5,000  bond  and  the  further  penalty  provided  by  the  General 
Usury  Law,  by  which  the  debt  is  cancelled  and  the  security  made 
void.  (a) 

Section  378  of  the  Penal  Code,  as  amended  in  1904, (b)  makes 
it  a  misdemeanor  to  charge  more  than  6  per  cent  per  annum  on 
loans  of  money  where  security  is  taken  for  such  loan  upon  house- 
hold furniture,  tools  or  implements  of  trade,  wearing  apparel  or 
jewelry;  and  under  the  General  Usury  Law(c)  the  penalty  for 
usury  is  loss  of  both  principal  and  interest.  It  is  readily  seen, 
therefore,  that  no  corporation  or  individual  can  legally  loan  money 
on  chattel  mortgage  security  at  a  higher  rate  than  6  per  cent  per 
annum  unless  incorporated  under  Chapter  326  of  the  laws  of 
1895  as  amended.     Yet,  of  the  concerns  doing  such  a  business  in 

(a)  In  the  case  of  Daniel  Pratt  ct  al.  vs.  Henry  W.  Short  et  al.,  (79  N.  Y. 
437),  the  court  held  that  "Where  a  prohibitory  statute  points  out  the  conse- 
quences of  its  own  violation  and  it  appears  to  have  been  the  legislative  intent 
to  exclude  any  otber  penalty  or  forfeiture  than  such  as  is  declared  in  the  statute, 
no  other  will  "be  enforced  and  an  action  may  be  maintained  upon  the  transaction 
of  which  the  prohibited  act  was  a  part  if  it  can  be  done  without  sanctioning  its 
illegality."  Subseciuent  court  decisions  seem  to  contradict  that  in  the  foregoing 
case,  as  in  Tyng  vs.  Commercial  Warehouse  Company  of  New  York  (58  N.  Y. 
308),  where  the  court  held  that  "A  company  authorized  to  charge  more  than 
the  legal  rate  has  no  more  power  to  charge  commissions  than  an  individual 
engaged  in  the  same  business.  Therefore  the  usury  laws  are  not  repealed  in 
the  defendant's  favor  and  it  is  a  question  of  fact  for  a  jury."  The  decision  of 
the  Court  of  Appeals  in  the  case  of  Lowry  vs.  Collateral  Loan  Association  (172 
N.  Y.  394),  affirming  the  decision  of  the  Appellate  Division  (62  App.  Div.,  240), 
gives  a  clear  interpretation  of  the  law  of  1895  overruling  the  decision  of  the 
lower  court  in  the  case  (79  N.  Y.  437),  cited  above.  The  court  was  of  the 
opinion  that  "Chapter  326  of  the  laws  of  1895,  providing  'for  the  incorporation 
of  associations  for  lending  money  on  personal  property,'  must  be  construed 
with  and  is  subject  to  statutes  relating  to  usury  ;  usurious  loans  made  by  such 
associations  are  subject  to  the  penalty  of  forfeiture.  The  statutes  relating  to 
usury  (1  R.  S.  771  and  amendments  thereto)  are  not  repealed  as  to  corporations 
formed  under  Chapter  326  of  the  laws  of  1895,  providing  'for  the  incorporation 
of  associations  for  lending  money  on  personal  property  .  .  .  and 
authorizing  such  corporations  to  take  as  security  for  the  payment  of  any  such 
loans  either  a  pledge  or  a  mortgage  of  any  personal  property'  and  to  'charge 
■or  receive  upon  each  loan  .  .  .  interest  or  discount  at  a  rate  not 
exceeding  3  per  cent  per  month  for  a  period  of  two  months  or  less,  and  not 
exceeding  2  per  cent  a  month  for  any  period  after  said  two  months.'  The 
■effect  of  the  two  statutes  when  read  together  is  to  increase  the  rate  of  interest 
upon  loans  covered  by  the  later  statute  and  to  apply  the  penalty  of  forfeiture 
prescribed  by  the  Usury  Act  if  the  rate  so  authorized  is  exceeded ;  and  a  person 
who  has  borrowed  money  upon  notes  secured  by  chattel  mortgages  from  a  cor- 
poration organized  and  doing  business  under  such  statutes  may,  upon  proof 
that  the  corporation  has  exacted  interest  and  charges  upon  the  loan  in  excess 
of  the  amounts  allowed  by  the  statute,  maintain  an  action  to  have  the  loan 
declared  void,  the  notes  and  the  mortgages  surrendered  and  the  corporation 
restrained  'pendente  lite'  from  foreclosing  the  mortgages." 

(b)  Appendix  II,  page  44. 

(c)  Cummings  and  Gilbert  Gen.   Laws,  pp.  1984-1995. 


THE  LAW.  15 

New  York  City,  only  three  have  taken  advantage  of  this  law  en- 
titling them  to  charge  more  than  the  legal  rate  of  interest.  These 
are  the  St.  Bartholomew's  Loan  Association,  the  City  Credit  Com- 
pany and  the  Fidelity  Loan  Association.  The  first,  founded  on  a 
philanthropic  basis,  is  loaning  money  to  the  extent  of  its  limited 
capital  at  1  per  cent  a  month.  Not  much  is  known  of  the  other 
two  companies  and  their  business  methods,  but  it  is  certain  that 
they  are  charging  at  least  the  full  2  per  cent  per  month  allowed 
by  the  law  under  which  they  are  incorporated,  in  addition  to  at 
least  the  legal  charge  for  papers,  etc. 

It  is  not  at  all  hazardous  to  say  that  with  the  exception  of 
the  three  above-mentioned,  not  one  of  the  many  loan  companies 
now  operating  is  doing  a  legal  business.  A  profitable  business  at 
6  per  cent  is  impossible.  The  usual  loan  of  $40  or  $50,  plus 
interest  charges,  is  divided  into  equal  payments,  payable  in  from 
three  to  six  monthly  installments.  The  interest  on  a  $50  loan  at 
6  per  cent  per  annum  for  six  months  would  be  $1.50.  There 
must  be  offset  against  this  the  salary  of  an  investigator  who  will 
examine  the  security  and  pass  upon  its  acceptability,  that  of  a 
collector  to  call  for  the  payments  as  they  fall  due  and  look  up 
those  who  are  seeking  to  dodge  their  settlements,  an  office  with  its 
attendant  expenses  for  bookkeeping,  cashier,  stenographer,  and 
maintenance,  as  well  as  the  usual  losses  and  necessary  fees  to 
attorneys.  All  of  these  expenses  must  be  paid  out  of  the  gross 
returns  from  loans.  Apart  from  direct  evidence  bearing  on  the 
point,  it  is  clear  that  a  6  per  cent  rate  would  not  cover  expenses. 
Yet  the  morning  papers  contain  several  columns  of  advertisements 
in  which  these  companies  claim  to  be  loaning  money  at  6  per  cent 
with  no  further  charges.  An  examination  of  the  actual  trans- 
action and  of  the  business  methods  of  these  companies  will  reflect 
at  once  the  absurdity  of  their  claim  of  legal  charges.  In  reality 
their  charges  run  from  100  to  150  per  cent  per  annum.  When 
the  applicant  for  a  short-time  loan  has  satisfied  the  lender  as  to 
the  value  of  his  security,  etc.,  he  is  informed  that  the  rate  will  be 
6  per  cent  per  annum,  and  in  addition  he  will  be  required  to  pay 
a  bonus  of  25  per  cent  to  30  per  cent,  which  will  be  deducted 
from  the  amount  of  the  loan.     Under  the  law,  the  imposing  of 


1 6  CHATTEL  LOAN  BUSINESS. 

such  charges  would  seem  to  constitute  usury,  upon  conviction  for 
which  an  offender  is  punishable  by  a  fine  and  imprisonment,  as 
well  as  by  loss  of  principal  and  interest.  But  by  a  skilful  method 
of  requiring  the  borrower  to  sign  a  receipt  for  the  full  amount, 
the  transaction  is  given  the  appearance  of  legality.  If  at  the  end 
of  the  period  for  which  the  loan  is  to  run  the  mortgagor  is  unable 
to  pay  off  his  debt,  the  same  excessive  charges  are  repeated  on  a 
new  loan,  or  foreclosure  proceedings  are  begun  and  the  borrower 
is  eventually  sold  out  at  auction.  Although  the  lender  seems  to 
be  able  to  conceal  the  usurious  nature  of  the  contract  and  to  bind 
the  borrower  to  a  settlement  in  full,  he  fears  the  effect  of  pub- 
licity upon  his  business,  and  almost  invariably  when  the  borrower 
secures  legal  assistance  and  shows  sign  of  readiness  to  fight  the 
claim  in  the  courts,  the  lender  is  willing  to  compromise  and  settle 
for  much  less  than  his  original  claim.  However,  the  great  mass 
of  borrowers  have  no  knowledge  of  this  fact,  and  the  lender's 
threat  of  legal  action  to  collect  is  usually  sufficient  to  make  the 
borrower  pay  the  claim  in  full.  An  attorney  in  this  city  who  has 
made  a  very  careful  study  of  the  law  in  relation  to  the  loan  busi- 
ness is  of  the  opinion  that  a  compromise  and  settlement  at  figures 
much  lower  than  the  amount  claimed  can  invariably  be  secured, 
if  borrowers  would  put  their  cases  in  the  hands  of  competent 
lawyers.  Yet  he  holds  to  the  view  that  owing  to  the  evasive 
methods  of  lenders  they  cannot  be  prosecuted  and  convicted  under 
the  present  law. 


III. 

METHODS  OF  BUSINESS. 

It  is  practically  impossible  accurately  to  determine  the  present 
number  of  agencies  loaning  money  on  chattel  mortgage  security 
in  New  York  City.  It  is  equally  impossible  to  estimate  the  num- 
ber of  people  borrowing,  the  volume  of  business  transacted  or  the 
amount  of  capital  invested.  The  only  place  where  this  informa- 
tion exists  is  on  the  books  of  the  companies,  which  are  obviously 
inaccessible  for  our  purposes.  The  number  of  companies  can 
roughly  be  estimated  as  not  far  from  forty,  for  there  are  thirty 
frequently  advertising  in  the  daily  newspapers  and  several  in 
addition  that  are  known  to  exist.  (a)  Three  of  these  companies 
are  incorporated  under  Chapter  326  of  the  laws  of  1895  as 
amended,  and  are  therefore  allowed  to  charge  2  per  cent  per 
month,  with  a  small  additional  charge  for  papers,  etc.  These  are 
the  St.  Bartholomew's  Loan  Association,  of  211  East  42nd  street; 
the  City  Credit  Company,  of  621  Broadway,  and  the  Fidelity 
Loan  Association,  of  140  Nassau  street,  previously  mentioned. 
The  remaining  companies  and  individuals  doing  business  under 
corporate  names,  as  well  as  individuals  doing  business  under  their 
own  names,  are  allowed  by  law  to  charge  only  6  per  cent  per 
annum.  How  far  they  keep  within  the  bounds  of  the  law  will  be 
seen.  With  few  exceptions  they  advertise  as  loaning  money  at 
the  legal  rate,  but  an  application  for  a  loan  reveals  the  fact  that 
the  charge  for  interest  is  but  a  small  part  of  the  total  cost  to  the 
borrower.  As  a  rule  these  companies  have  no  schedule  of  rates 
to  which  they  strictly  adhere.  They  exact  all  that  the  borrower, 
in  desperation  or  in  ignorance  or  neglect  of  legal  rates,  will  agree 
to  pay. 

(")   Appendix  VI,  page  51. 


l8  CHATTEL  LOAN  BUSINESS. 

A  few  extracts  will  show  the  methods  of  advertising  by  which 
these  money  lenders  seek  to  attract  patrons : 

6%     Loans  Quickly  Made    6% 

From  i  to  12  months  to  man  and  wife  on 
furniture,  pianos,  machinery,  without  removal ; 
rents,  bankbooks  and  all  other  securities ;  easy 
payments,  weekly  or  monthly;  strictly  confi- 
dential. 

Leslie  Realty  Co.  (Inc.), 
145  West  125th  St.,  opp.  Koch's. 


Lower  Rates  Than  All  Others  In  City. 

Quick  loans  to  husband  or  wife,  any 
amount,  longest  time,  on  pianos,  furniture, 
autos,  carriages,  trucks,  horses,  without  re- 
moval ;  rents ;  easy  payments ;  confidential. 
London  Realty  Co.  (Inc.), 
1265  Broadway,  Near  32d  St.  Tel.  4656-Mad. 
375  Fulton  St.,  B'klyn.,  Opp.  City  Hall. 


Money  At  Lower  Rates  Than  All  Others 

at  6  per  cent  per  year  in  any  amount  in 
Greater  New  York  on  furniture,  pianos,  with- 
out removal ;  rents,  legacies,  machinery,  second 
mortgages,  bank  books,  real  estate,  horses, 
carriages  and  all  other  securities ;  easy  pay- 
ments, weekly  or  monthly ;  strictly  confidential. 

MONEY  BROUGHT  TO  YOUR  HOME. 

If  not  convenient  to  call,  fill  out  this  blank, 
mail  it  to  any  of  our  offices,  and  our  agent  will 
call  at  once  with  the  money. 


METHODS    OF    BUSINESS.  19 

Name    

Address    

Amount  wanted  $ 

On  security  of 

Adelphi  Realty  Co.  (Inc.) 
Main  Office— 116  Nassau  St.,  N.  Y. 
20  E.  120th  St.  373  E.  146th  St. 

Brooklyn  Branches :        35  Cooper  St. 
408  Gates  Ave. 
295/"2  Atlantic  Ave.     1867  Fulton  St. 

The  man  in  need  of  money  fills  in  the  blanks  in  the  above 
advertisement,  mails  the  clipping  to  the  company's  office,  and  by 
return  mail  receives  the  following  reply: 

Mr 

Dear  Sir. — Your  application  for  a  loan  re- 
ceived, acted  upon  and  passed  favorably. 
Kindly  call  at  once  at  our  main  office,  116 
Nassau  street,  near  General  Post  Office,  New 
York  City,  with  a  list  of  your  chattels,  and  we 
will  fix  up  the  matter  for  you  immediately. 

In  case  you  cannot  call  during  the  day,  you 
may  call  at  21 10  Fifth  Ave.,  New  York  City, 
any  evening  between  8  and  9  (except  Friday), 
and  ask  for  our  Mr.  B. 

Yours  respectfully, 

A.  R.  Co., 

Per  J.  B. 

When  the  applicant  calls  at  the  office  he  is  asked  the  stock 
questions  and  made  to  fill  in  the  application  blank,  just  as  if  the 
company  had  never  heard  of  him  before.  This  method  attracts 
many  prospective  borrowers. 

As  a  rule  loan  companies  are  very  secretive  as  regards  their 
schedule  of  rates,  and  at  the  time  an  application  is  made  it  is 
difficult  to  learn  from  them  just  what  their  charges  will  be.  The 
writer  applied  for  a  loan  at  the  office  of  the  Adelphi  Realty 


20  CHATTEL  LOAN  BUSINESS. 

Company  and  was  told  that  the  charge  would  be  ^  of  i  per  cent 
per  month.  When  he  asked  if  this  would  be  the  total  cost  and 
if  there  would  be  no  further  charge  of  any  sort,  the  young  lady 
in  charge  said,  "Oh,  yes,  there  will  be  some  charge  for  investi- 
gating your  security  and  for  making  out  the  necessary  papers, 
but  we  can't  tell  how  much  that  will  be  until  we  have  seen  your 
furniture  and  looked  up  your  references." 

However,  the  writer  applied  for  a  loan  of  $50  at  the  office  of 
the  Broadway  Securities  Company,  Broadway  and  28th  street,  (a) 
and  was  told  at  once  that  the  charges  would  be  $15  for  the  use  of 
$50  for  two  months. 

This  represents  the  amount  charged  by  most  of  the  companies, 
which  averages  a  rate  of  100  per  cent  and  upward  per  annum, 
although  in  a  number  of  cases  now  on  file  in  the  Bureau  of  Social 
Research  even  these  rates  have  been  exceeded. 

The  following  list  of  rates,  obtained  from  some  of  the  most 
important  companies,  gives  an  idea  of  their  customary  charges 
covering  principal  and  interest : 

Acme  Security  Company,  289  Fourth  Avenue — 

$50   for  8  weeks — 8  notes   for  $10,   each  payable 

weekly. 
If  one  payment  is  missed  50  cents  extra  is  charged. 
Adelphi  Realty  Company,  116  Nassau  Street — 

$50   for   12  weeks — 12   weekly  payments  of  $6.25 
each. 
Ariston  Realty  Company,  1 10  West  34th  Street — 

$40  for  10  weeks — $5.75  weekly. 
Anchor  Realty  Company,  31  West  42d  Street — 

$50  for  4  months — $15  monthly. 
Riverside  Security  Company,  271  West  125th  Street — 

$50  for  8  weeks — $7.50  weekly. 
Seiff,  217  West  125th  Street — 

$50  for  8  weeks — $8  weekly. 
Bryant,  140  West  42d  Street — 

$50  for  8  weeks — $10  weekly. 

(*)     Bernard  Wolf,  doing  business  under  name  of  Broadway   Securities  Co. 


METHODS    OF    BUSINESS.  21 

The  usual  length  of  time  for  loans  to  run  is  two  or  three 
months,  and  loans  taken  for  shorter  periods  seem  to  bear  nearly 
the  same  charges. 

It  is  hardly  necessary  to  state  again  that  money  lenders  sel- 
dom openly  violate  the  law  so  as  to  render  themselves  liable  to 
the  charge  of  exacting  usury,  involving  not  only  loss  of  prin- 
cipal and  interest,  but  also  ground  for  criminal  prosecution ;  on 
the  contrary,  they  have  many  devices  by  means  of  which  they 
conceal  the  nature  of  the  transaction.  By  far  the  most  common 
of  these  devices,  in  fact  the  one  almost  universally  practised 
at  the  present  time,  is  that  of  deducting  a  certain  sum  from  the 
amount  borrowed  as  a  charge  for  papers,  etc.,  and  of  requiring 
the  borrower  to  sign  a  receipt  for  the  full  amount  and  notes  for 
this  sum  plus  the  legal  rate  of  interest.  The  sum  thus  deducted 
is  usually  twenty  to  twenty-five  per  cent  of  the  loan.  The  fol- 
lowing cases  illustrate  the  operation  of  this  method: 

On  August  21,  1908,  a  lady  borrowed  $105  from  the  Times 
Square  Realty  Company,  Broadway  and  41st  street.  On  October 
9  she  took  out  another  loan  with  the  St.  Bartholomew's  Loan 
Association  for  the  purpose  of  settling  her  account  with  the 
Times  Square  Company.  The  manager  of  the  latter  company 
refused  to  give  up  the  mortgage  unless  $125  were  paid.  This 
sum,  he  claimed,  was  the  amount  of  the  loan,  and  in  addition 
he  demanded  $1.25  interest  charges.  The  lady  paid  the  $125, 
but  refused  to  pay  the  "interest"  charges  and  the  matter  was  not 
pressed. 

A  Mr.  C borrowed  $100  from  the  Anchor  Realty  Com- 
pany, of  31  West  42d  Street,  receiving  only  $84  in  cash.  He  was 
required  to  sign  a  receipt  for  $100  and  four  notes  aggregating 
this  sum  plus  the  legal  interest,  payable  monthly. 

Another  device  commonly  practised  is  that  of  requiring  the 
borrower  to  purchase  so-called  "oil  paintings"  of  the  loan  com- 
pany at  a  figure  far  exceeding  their  actual  value.     The  following 

case  illustrates  the  method:  Mr.  T borrowed  $100  from  the 

State  Credit  Company  for  a  period  of  four  months,  for  which 
loan  he  paid  $150.  At  the  time  of  taking  the  loan  he  was 
required  to  purchase  of  the  company  two  oil  paintings  at  $5.00 


22  CHATTEL  LOAN  BUSINESS. 

each,  making  $10,  which  was  deducted  from  the  $100  he  was 
to  receive.  The  pictures,  according  to  the  statement  of  the  bor- 
rower, were  worthless. 

Another  device  employed  is  that  of  requiring  the  borrower 
to  take  out  insurance  on  the  life  of  a  relative  with  a  designated 
insurance   company,    from   which   company   the   lender   without 

doubt  receives   a  commission.     Mr.   M borrowed  $50   for 

three  months  and  paid  $5.48  weekly,  or  $65.75  in  all.  In  addi- 
tion he  was  required  to  take  out  an  insurance  policy  for  which 
he  paid  $8.00. 

A  further  means  of  evading  the  law  is  that  of  ostensibly  pur- 
chasing the  furniture  of  the  borrower  and  renting  it  back  for  a 
certain  number  of  months  at  a  figure  far  exceeding  the  legal  rate 
of  interest.  When  a  sufficient  number  of  payments  have  been 
made  the  title  to  the  furniture  is  returned  to  the  borrower. 

As  previously  stated,  the  first-mentioned  device  is  by  far  the 
most  common,  and  since  the  borrower  is  allowed  to  bring  no 
one  with  him  when  he  calls  at  the  office  for  his  money  it  is  a 
secure  protection  to  the  lender,  since  the  receipt  for  the  full 
amount  is  legal  evidence  of  the  debt.  The  amounts  exacted  by 
such  means  over  and  above  the  legal  rate  vary,  but  the  system 
remains  constant,  the  end  and  aim  of  such  business  evidently 
being  to  exact  all  that  the  traffic  will  bear. 

A  very  common  method  by  which  the  loan  concerns  seek  to 
get  an  additional  rate  of  interest  is  by  encouraging  their  clients 
to  take  a  new  loan  before  the  old  one  has  been  paid.  If  a  bor- 
rower finds  it  impossible  to  meet  a  payment  he  will  be  accom- 
modated with  a  further  loan  on  similar  terms.  The  following 
case  illustrates  this  point:  A  working  woman,  in  great  need  of 
a  small  loan,  borrowed  $22  from  the  London  Realty  Company, 
receiving  $15  in  cash.  She  signed  a  note  for  %22,  plus  6  per  cent 
interest,  to  be  repaid  in  twelve  weekly  payments.  After  having 
made  six  payments  and  finding  herself  unable  to  meet  the  one 
next  due,  at  the  advice  of  the  company  she  took  a  new  loan  in 
order  to  settle  the  old  one.  As  a  matter  of  course  the  usual 
bonus  was  deducted  by  the  company,  plus  the  amount  she  still 
owed,  so  that  she  received  almost  nothing,  but  was  now  indebted 
for  a  much  greater  sum  than  before.      She  was   an  ignorant 


METHODS    OF    BUSINESS.  23 

woman,  unable  to  understand  the  legal  forms  she  signed,  but  she 
did  understand  that  unless  she  made  her  payments  promptly  she 
would  lose  her  furniture.  She  has  gone  on  for  four  years,  taking 
new  loans  to  settle  the  old  ones,  until  now  she  is  paying  $2.16 
every  week,  and  is  still  indebted  to  the  London  Realty  Company 
to  the  amount  of  $24.  When  the  writer  suggested  that  she  had 
paid  about  enough  to  the  loan  company,  she  said  she  dared  not 
stop  paying  what  they  asked  for  fear  they  would  come  and 
take  her  furniture,  and  if  that  happened  she  did  not  know  what 
she  would  do.  In  line  with  this  illustration  it  would  seem  that 
the  main  value  of  a  mortgage  to  the  lender  is  often  the  moral 
effect  it  can  be  made  to  produce  upon  the  borrower. 


IV. 

EXPERIENCES  IN  PHILADELPHIA. 

This  demoralizing  system  of  extortion  is  by  no  means  con- 
fined to  New  York  City.  Every  large  city  of  the  country  is 
affected  by  it,  and  in  a  number  crusades  have  been  undertaken 
to  stamp  out  the  evil.  One  of  the  first  cities  to  engage  in  this 
movement  was  Baltimore,  and  the  excellent  work  of  the  Chattel 
Loan  Association  of  Baltimore  in  connection  with  it  is  described 
later  in  this  report;  but  the  results  of  the  crusade  conducted  by 
the  Police  Department  in  Philadelphia  are  even  more  illustrative 
of  the  situation.  (a). 

The  industrial  depression  following  the  panic  of  October, 
1907,  threw  many  men  out  of  employment  in  Philadelphia.  They 
were  consequently  unable  to  meet  payments  due  the  loan  com- 
panies, and  the  sheriff's  office  was  flooded  with  executions.  This 
unusual  activity  on  the  part  of  the  loan  companies  attracted  the 
attention  of  the  sheriff  and  led  to  an  inquiry  on  his  part  into  the 
situation.  The  startling  disclosures  resulting  led  to  a  more 
extended  investigation  by  detectives  into  the  business  practices 
and  methods  of  the  money  lenders.  The  offices  of  a  number  of 
the  larger  concerns  were  raided  and  the  books  and  papers  seized. 
At  the  same  time  widespread  publicity  was  given  to  these  activ- 
ities, and  people  who  had  borrowed  money  were  invited  to  pre- 
sent their  claims  and  grievances  to  designated  officials.  On  the 
basis  of  the  mass  of  evidence  thus  secured  a  number  of  loan 
office  managers  were  arrested.  As  far  as  we  know  none  of  these 
cases  has  yet  come  to  trial,  but  the  books  seized  are  still  in  pos- 

(a)  The  description  of  the  Philadelphia  situation  which  follows,  is  sum- 
marized from  an  unpublished  report  on  the  subject,  prepared  by  Dr.  Frank 
Julian  Warne, 


EXPERIENCES   IN    PHILADELPHIA.  25 

session  of  the  police.     Meanwhile  loan  companies  continue  to 
do  business,  and  some  new  ones  have  been  started. 

At  the  time  these  arrests  were  made  thirty-five  companies 
were  found  to  be  operating  throughout  the  city,  besides  many 
individuals  engaged  in  the  same  business,  and  the  detectives  be- 
lieved that  at  least  thirty  additional  companies  were  active,  as 
well  as  a  number  of  individual  concerns,  sufficient  to  bring  the 
total  up  to  one  hundred  and  seventy-five.  Many  of  these  com- 
panies had  branch  offices  in  different  parts  of  the  city.  All  of  the 
thirty-five  companies  with  which  the  detectives  were  familiar  ad- 
vertised extensively  and  employed  various  other  devices  coupled 
with  promises  of  secrecy  and  easy  payments,  by  which  to  attract 
borrowers.  The  intending  borrower  on  furniture  was  required  to 
sign  the  following  blank : 

I hereby  make  application  through 

my  agent to   for 

the  loan  of dollars;  said  loan  to  run  for 

the  period  of   months;   to  be  paid   in 

monthly  installments  and  in  addition 

to  the  amount  of  the  loan  I  agree  to  pay  the  sum  of 

dollars,  which  I  understand  is  the 

charge  for  drafting  papers,  appraising  my  property 
and  looking  up  the  title  to  same,  making  all  necessary 
searches,  including  the  judgment  records;  and  also  the 

interest  at  six   %   in  advance    190 

This  makes  my  total  indebtedness  amount  to 

dollars. 

The  application  blank  from  which  the  above  was  copied  was 
filled  out  for  a  loan  of  $150,  to  run  for  fifteen  months,  to  be  paid 
in  fifteen  monthly  installments  of  $15.65  each,  making  a  total 
return  of  $234.75  for  a  loan  of  $150.  Thus  the  amount  the 
borrower  agreed  to  pay  in  addition  to  the  loan  was  $84.75,  f°r 
"drafting  papers,  appraising  my  property  and  looking  up  the 
title  to  same,  making  all  necessary  searches,  including  judgment 
records,  and  also  the  interest  at  6  per  cent  in  advance." 

As  security  for  the  loan,  chattel  mortgages  and  judgment 
notes  were  given.  Usually  these  chattel  mortgages  were  signed 
in  blank  by  the  borrower  and  filled  in  by  the  lender  whenever 
payments  stopped.  On  failure  to  pay  the  company  usually  filled 
in  the  judgment  note  signed  in  blank,  put  this  in  the  hands  of  the 
sheriff  who  seized  the  borrower's  goods  "by  due  process  of  law." 


26  CHATTEL  LOAN  BUSINESS. 

The  borrower  was   also  required  to  fill   out  the   following 
blank  for  the  lender's  information: 

190.... 

Name   

Wife's   Name    

Address    

Have  lived  there 

Where  you  are 

Last   address    Time 

Payments  per 

Property Valued  at 

Any  incumbrance  on  goods To  whom 

What  amount 

Did  you  ever  have  a  loan  before   

What  company 

Employed    by     

In  capacity  of How  long 

Previous  employed  by for   

Look  up   

Wants  money  by    

Appraiser's  condition  reported 

For    $ 

Remarks   


Appraised  by 

Recorded  by   

Inventory  of  property. 


The  chattel  mortgage  blank  which  the  borrower  was  required 
to  fill  out  and  sign  stated  that  the  articles  therein  enumerated 
were  security  for  the  payment  of  the  indebtedness  thus  incurred. 
What  the  borrower  actually  did  was  to  sell  outright  his  property 
to  the  lender  upon  condition  that  it  be  returned  to  him  when  the 
sum  agreed  upon  had  been  paid.  In  case  of  default  the  borrower 
empowered  the  lender  "with  the  aid  and  assistance  of  any  person 
or  persons  to  enter  his  dwelling,  house,  store  and  other  premises, 
and  such  other  place  or  places  as  the  said  goods  or  chattels  are 
or  may  be  placed,  and  take  and  carry  away  the  said  goods  as 
chattels,  and  to  sell  and  dispose  of  the  same  for  the  best  price 
he  can  obtain ;  and  out  of  the  money  arising  therefrom,  to  retain 
and  pay  the  said  sum  above  mentioned  *  *  *  and  all  charges 
touching  the  same,  rendering  the  overplus  (if  any)  unto  the  bor- 
rower or  his  administrators."  If  the  borrower  keeps  up  his  pay- 
ments he  is  "to  remain  and  continue  in  quiet  and  peaceable  pos- 


EXPERIENCES   IN   PHILADELPHIA.  27 

session  of  the  said  goods  and  chattels  and  the  full  and  free  enjoy- 
ment of  the  same." 

Having  complied  with  these  necessary  requirements  the  bor- 
rower received  the  money,  not  the  amount  applied  for,  however, 
although  the  notes  signed  indicated  the  receipt  of  this  sum,  but 
the  amount  remaining  after  commissions,  fees,  costs  of  investi- 
gation, paper,  etc.,  had  been  deducted, — and  this  in  spite  of  the 
advertisements  of  the  companies  guaranteeing  "the  full  amount 
in  cash;  nothing  deducted." 

Loans  of  $20  were  made  for  no  longer  period  than  seven 
months;  loans  of  $50  or  more  were  made  for  not  less  than  six 
months;  and  as  a  rule  loans  for  $175  and  more  were  made  for 
no  shorter  time  than  ten  months,  and  usually  they  extended  over 
an  entire  year.  The  scale  card  of  rates  charged  by  the  companies 
was  found  to  be  by  no  means  rigidly  followed,  for  in  many  cases 
the  monthly  installments  and  the  total  amounts  returned  on  simi- 
lar loans  varied  considerably.  In  this  connection  the  practices 
of  one  representative  company  differed  in  the  case  of  different 
borrowers  of  similar  amounts  for  the  same  period.  On  forty- 
eight  loans  of  $10  for  five  months,  four  different  rates  were 
charged.  Thirty-five  of  these  borrowers  each  paid  monthly  $3.10, 
or  a  total  of  $15.50;  seven  paid  $3.25  each  month,  or  a  total  of 
$16.25 ;  four  paid  $3.30  monthly,  or  $16.50,  while  two  paid  $3.35, 
or  $16.75.  Of  the  sixty-two  who  borrowed  $20  for  seven  months, 
thirty-nine  paid  $4.30  monthly,  or  a  total  of  $30.10;  nine  paid 
$4.45,  or  $31.15;  eight  paid  $4.40,  or  $30.80;  three  paid  $4.60, 
or  $32.20;  one  paid  $4.66,  or  $32.62;  one  paid  $4.30,  or  $30.10, 
and  one  paid  $4.25,  or  $29.75.  Of  eighty-six  loans  of  $25  for 
seven  months,  fifty-four  borrowers  paid  $5.30  each  month,  or  a 
total  of  $37.10;  fourteen  paid  $5.45,  or  $38.15 ;  twelve  paid  $5.40, 
or  $37.80;  four  paid  $5.35,  or  $37.45;  and  in  two  other  cases  one 
paid  $5.30  monthly,  or  $37.10,  and  the  other  $5.55,  or  $38.85.  (a) 

This  variation  of  rate  was  quite  prevalent.     There  may  be 

(»)    If  presented  in  the  scale  card  table  these  charges  would  he  as  follows : 

«m  t^  «™  ™™      J  $3.10  :$3.25  :$3.30  :$3.35  : 
$10  for  five  mos.     f  |5  50  .f  6  25  .f6  50  .JQ75  . 

eon  *~„  c„™ o   5  $4-25  :S4.30  :$4.40  :$4.45  :$4.60  :$4.66  : 

$20  for  seven  mos.  {  £9  75  .g0  10  .g0  80  £115  .g2  20  .§2  62  . 

«9*  *™  *^c„  ™™   J  37.10  :  :37.45  :37.80  :38  :15  :38.S5  : 
$25  for  seven  mos.  j  37  10  :37>45  ;37  80  :38  15  :3g  85  . 


28  CHATTEL  LOAN   BUSINESS. 

no  genuine  business  explanation  for  the  practice,  but  it  may  have 
been  due  to  the  varying  ability  of  borrowers  to  make  their  pay- 
ments, the  greater  rate  being  charged  where  the  greater  risk  was 
incurred. 

A  similar  variation  also  existed  in  rates  charged  for  similar 
loans  for  different  periods.  For  $10  for  three,  four,  five,  six, 
and  seven  months  respectively,  the  charges  were  as  follows : 
$14.40,  $14.00,  $15.50,  $15.60  and  $18.20.  The  same  in  general 
is  true  of  larger  loans.  This  variation  is  possibly  explained  by 
the  fact  that  there  was  a  greater  demand  for  loans  for  three 
months  than  for  four,  hence  the  greater  charge  for  the  shorter 
period,  the  lower  rates  being  used  by  the  lender  as  a  means  of 
advertising  his  business. 

An  analysis  of  the  seven  hundred  and  fourteen  loans  on 
household  goods  made  by  one  representative  company  covering 
a  period  of  six  months  shows  the  number  and  percentage  of  bor- 
rowers for  the  respective  periods  to  be  as  follows : 


LENGTH  Ojt  i'IME 
IN  MONTHS. 

1       

NUMBER  OF 
BORROWERS. 
1       

PER  CENT, 
14 

2      

2       

.28 

3      

40      

5.60 

4      

17      

2.38 

5      

107      

15.00 

6      

72      

10.08 

7      

299      

41.88 

8      

13      

1.82 

9      

27      

3.78 

10      

85      

11.90 

12      

51      

7.14 

The  amount  secured  by  these  714  borrowers  and  the  number 
and  percentage  in  each  loan  group  is  as  follows : 

AMOUNT  NUMBER  OF 

BORROWED.  BORROWERS.  PER  CENT. 

$10  93   13.02 

11  to  20  225   31.51 

21  to  30  179   25.07 

31  to  40  46   6.44 

41  to  50  67   9.38 

51  to  75  36   ,  ...    5.04 

76  to  100  39   5.47 

101  to  150  18   2.52 

151  to  200  8   1.12 

250  2   28 

300  1   14 


EXPERIENCES   IN    PHILADELPHIA.  2Cf 

When  a  payment  is  not  promptly  met  the  lender  at  once  puts 
his  machinery  into  operation.  He  writes  the  delinquent  bor- 
rower, pointing  out  the  significance  of  his  promise  to  pay,  the 
legal  punishment  for  failure  to  do  so,  and  ends  by  threatening 
action  unless  payment  is  made  at  once.  These  threats  and 
demands  are  continued,  and  at  the  same  time  "dun  letters"  in 
glaring  red  envelopes,  with  the  name  of  the  loan  company  dis- 
played in  large  type,  are  sent  to  the  borrower's  home  and  place 
of  employment.  Collectors  make  frequent  calls,  and  thus  the 
borrower  is  constantly  "hounded."  Finally  he  receives  some  such 
letter  as  the  following: 


"Dear    Sir:  — 
You  have  failed  to  pay  your  note  of  November  11th, 

as  you  promised  you  would.    Now,  Mr.  H ,  we 

have  this  to  say  to  you  for  the  last  time;  we  will  not 
fool  with  you  longer,  but  if  this  is  not  paid  by  6  p.  m. 
November  13th,  without  fail,  we  shall  issue  execution 
against  you  at  once  and  have  the  sheriff's  office  sell 
the  furniture  to  satisfy  this  ^bt  of  yours  to  us." 


Or  a  letter  of  this  type : 

Philadelphia,  Pa.,  190 .... 
"Dear  Sir  and  Madam:  — 

Our  clients   of  this  city  have 

placed  in  our  hands  for  collection  a  claim  against  you 

of  ,  this  amount  being  the  balance  due  on 

money  borrowed  by  you  and  for  which  you  assigned 
all  your  collateral  over  to  the  said  company,  and  in 
addition  signed  a  judgment  note  containing  a  Waiver 
to  the  $300    exemption  law. 

The informs  us  that  they  have  re- 
peatedly requested  a  settlement  of  this  account  by 
you,  and  you  have  not  only  ignored  their  requests  and 
disregarded  the  papers  you  have  signed,  but  you  have 
not  shown   the   slightest  disposition   to   pay. 

If  you  wish  to  adjust  this  matter  in  an  amicable 
way,  and  without  compelling  us  to  proceed  legally,  we 
would   advise  you   to  remit  or   call    at  this   office   by 


In  the  event  of  your  failure  to  do  as  requested,  we 
shall  issue  execution  on  the  note  signed  by  you  out 
of  Common  Pleas  Court,  and  additional  costs  and  in- 
terest. This  procedure  will  mean  a  levy  on  all  your 
household  effects  by  the  sheriff. 

Very  respectfully, 


30  CHATTEL  LOAN  BUSINESS. 

But  if  the  borrower  still  refuses  to  pay,  he  gets  the  following 
spurious  foreclosure  notice : 

"Notice   of  Foreclosure 

State  of   Pennsylvania,  ] 
County  of   Jss,: 

To  whom  it  may  concern: 

Default  having  been  made  in  the  conditions  of  a 
certain  judgment  note  secured  by  Bill  of  Sale  as  col- 
lateral security,  made  and  executed  by and 

of  the  City  of  County 

of  State  of  Pennsylvania,  to 

at  the  office  of under  which  contract 

and  agreement  there  is  due  and  remaining  unpaid  at 
the  date  hereof,  the  sum  of  $ 

Inasmuch  as  the  said and 

acting  as  custodian  (s)   for  said  goods  have  defaulted 

in  the  conditions  aforesaid,  the  said  

will  be  obliged  to  take  steps  at  once  to  take  personal 
possession  of  said  goods  according  to  law  and  the  terms 
of   said   contract. 

Unless  payment  is  made  at  the  office  of  the 

at or  satisfactory  arrangements  made 

on  or  before  the day  of 

190 by   o'clock M. 


By   

Signed,  sealed  and  delivered  this  Agent. 
day  of A.  D.  190 " 

And  if  there  is  still  no  satisfactory  response  the  notification 
of  a  fake  execution  sale  is  sent  to  the  borrower.  This  feigned 
use  of  the  official  authority  has  been  of  considerable  influence 
in  frightening  borrowers  into  complying  with  the  lender's  de- 
mands. There  also  appears  to  exist  an  alliance  between  the 
money  lenders  and  shyster  attorneys,  as  the  following  interview 
appearing  in  the  Philadelphia  Public  Ledger  of  January  16,  1908, 
shows.  The  speaker  was  the  sheriff's  solicitor,  George  S.  Rus- 
sel,  Esq. 

"The  legal  work  done  for  the  money  lenders  is  not  confined 
to  any  one  class  of  attorneys,  as  might  be  imagined.  I  have  the 
names  of  twenty-three  members  of  the  Philadelphia  bar  before 
me  who  have  writs  here  for  various  money  lending  firms.  We 
have  nothing  to  congratulate  ourselves  upon  in  our  system  of 


EXPERIENCES   IN   PHILADELPHIA.  3 1 

enforcing  the  rapacious  claims  of  the  money  lenders.  I  have 
been  in  close  touch  with  hundreds  of  instances,  and  the  public 
is  in  ignorance  of  the  shameful  abuse  of  our  court  processes 
under  excuse  of  the  law.  Of  the  many  writs  of  execution  where 
the  household  goods  of  the  debtor  are  seized  and  sold  by  the 
sheriff  at  least  one-fourth  are  issued  by  money  lenders,  com- 
pared to  whom  the  memory  of  Shylock  is  a  monument  to  charity. 
Debts  incurred  to  money  lenders  under  conditions  of  distress 
and  misfortune  are  obtained  by  a  contract  by  which  the  person 
duped  renounces  and  waives  every  right  and  legal  safeguard. 
After  thus  rendering  himself  and  those  depending  upon  him 
helpless,  he  adds  to  his  misery  the  additional  burden  of  paying 
his  tormentor's  attorney's  fees  and  the  costs." 

If  after  this  threatening  process  the  borrower  still  fails  to 
pay,  the  loan  company,  when  it  feels  secure,  resorts  to  law.  Of 
2,582  writs  of  execution  received  by  the  sheriff  of  Philadelphia 
County  in  1907,  about  40  per  cent  were  from  money  lending  com- 
panies, and  of  the  whole  number,  2,362  were  returned  as  satis- 
fied.   This  shows  the  extent  of  the  loan  business  in  Philadelphia. 

The  costs  of  such  proceedings  to  the  borrower  are  illustrated 
by  the  following  case  in  which  action  was  brought  to  recover  a 
balance  of  $17  on  a  loan  of  $50.  The  additional  costs  amounted 
to  $15.94,  including  the  following  items:  Costs  for  attorney  for 
plaintiff,  $4.12;  prothonotary  fee,  $3.37;  sheriff's  costs,  $3.50; 
service  of  writ,  $0.25;  mileage,  $0.10;  publishing  hand  bills  of 
sale,  $4.35.  In  addition  to  these  costs,  in  the  case  of  a  sale  of  the 
borrower's  goods  an  additional  2  per  cent  is  included  for  "pound- 
age." Where  the  amount  sued  for  is  small,  as  is  true  in  most 
cases,  the  costs  to  the  dependent  borrower  may  total  from  two  to 
five  times  the  sum  which  the  money  lender  sues  to  recover. 

The  following  case  shows  the  close  connection  existing  be- 
tween the  business  of  the  so-called  "rival"  loan  companies  and 
the  operation  of  some  of  their  methods  of  business : 

Mrs.  A.  secured  a  loan  of  $30,  on  which  sum  she  paid  charges 
but  received  only  $20.  She  made  her  last  payment  on  February 
20th,  1905,  to  close  her  account  and  received  a  receipt  "in  full 
of  all  payments  to  date."     Seven  months  later,  on  September  1st, 


32  CHATTEL  LOAN   BUSINESS. 

1905,  her  husband  received  a  letter  from  a  constable  and  col- 
lector, reading  as  follows : 

"In  regard  to  $8.25  claim  for   Security  Co. 

Dear   Sir: 
The  above  noted  claim  has  been  placed  in  my  hands 

against  you  for  settlement  in  favor  of   

Security  and  Loan  Co.  for  which  I  hold  your  note  and 
bill  of  sale.  I  will  allow  you  five  days  from  this  date 
to  arrange  a  settlement.  After  that  time  I  shall  pro- 
ceed legally  to  collect  my  claim  and  the  costs  that 
accrue  will  be  added  to  your  present  indebtedness. 
Bring  this  notice  with  you." 

About  this  time  Mrs.  A.'s  little  child  died.  Needing  money 
for  funeral  expenses,  Mrs.  A.,  having  twice  declined  to  pay  the 
$8.25,  applied  for  a  loan  of  $40  from  a  different  loan  company. 
This  company  knew  all  about  her  relations  with  the  other  com- 
pany, and  the  manager  said  he  would  make  the  $40  loan  to  her 
if  she  would  settle  the  claim  of  the  first  company  unjustly  held 
against  her.  Because  of  her  great  need  she  paid  the  $8.25  claim- 
ed by  the  first  company,  but  the  manager  of  the  second  company 
now  declined  to  keep  his  promise  and  refused  to  make  the  new 
loan  of  $40.  Later  Mrs.  A.  received  a  letter  from  the  first  com- 
pany to  the  effect  that  "A  payment  of  $1.25  will  fall  due  on  Sep- 
tember 30th.    Kindly  give  this  matter  your  immediate  attention." 

The  following  letter,  written  by  a  borrower  to  the  Philadel- 
phia detectives,  shows  how  the  lender  takes  unfair  advantage  of 
the  borrower's  ignorance  of  legal  matters : 

"The  percentage  they  charge  is  awful  and  when  you 
get  behind  in  your  payments  they  threaten  to  take 
your  goods  and  you  are  compelled  to  pay  them  what- 
ever they  ask.  Only  this  week  I  was  a  victim  of  one, 
having  borrowed  $5.00  for  which  I  was  to  pay  $8.00.  I 
got  back  in  my  payments.  They  came  and  was  going 
to  take  my  furniture.  To  save  it  I  was  compelled  to 
pay  them  $12.00." 

This  campaign  conducted  by  the  Philadelphia  Department  of 
Public  Safety  seriously  affected  the  receipts  of  the  loan  com- 
panies for  the  time  being;  but  it  cannot  be  said  that  the  cam- 
paign was  productive  of  any  lasting  results,  for  as  soon  as  the 
activity  of  the  Department  waned  business  returned  to  its  former 


EXPERIENCES   IN    PHILADELPHIA.  33 

basis.  Not  only  are  the  old  companies  continuing  to  operate  as 
we  have  said,  but  new  companies  of  the  same  sort  are  known 
to  have  entered  the  field. 

Crusades  directed  against  the  loan  companies  similar  to  that 
of  the  Police  Department  of  Philadelphia  have  been  undertaken 
by  the  press  and  other  agencies  in  many  other  cities  of  the  coun- 
try; but  the  results  have  been  of  no  great  value,  except  in  those 
cities  where  the  investigations  led  to  the  founding  of  philan- 
thropic loan  agencies  to  compete  with  the  extortionate  money 
lenders.  Prominent  among  such  cities  are  Baltimore  and  Cin- 
cinnati, and  the  benefits  derived  by  the  needy  from  these  institu- 
tions can  hardly  be  overestimated. 


V. 

WHAT  THE  PHILANTHROPIC  COMPANIES  ARE 

DOING. 

To  illustrate  the  proposition  that  competition  can  accomplish 
much  in  regulating  the  loan  business,  no  better  instance  can 
be  given  than  the  history  of  the  Chattel  Loan  Association  of  Bal- 
timore. (a)  Baltimore,  a  city  of  homes,  was  considered  one  of 
the  best  "loan  towns"  on  the  Atlantic  coast.  The  state  constitu- 
tion, while  it  ordained  that  6  per  cent  per  annum  should  be  the 
legal  rate  of  interest,  did  not  provide  a  penalty  for  charging  more 
than  this  rate ;  the  victim  of  the  money  lender  was  entitled  to 
recover  only  the  excessive  interest  paid  and  the  lender  otherwise 
went  free.  A  reasonable  fee  was  also  allowed  the  lender  for 
drawing  papers,  etc.,  and  gradually  it  became  the  practice  to 
charge  a  minimum  fee  of  $3.50  for  loans  under  $50  for  papers, 
and  as  much  more  as  could  be  collected  on  loans  of  larger 
amounts.  The  scale  of  rates  for  loans  increased,  until  in  1898 
charges  were  about  as  follows : 

For  loans  under  $50,  10  per  cent  per  month  for  interest,  from 
$3.50  to  $5.00  for  papers,  and  $1.00  to  $2.00  for  recording  and 
acknowledgments  before  a  notary;  for  loans  not  over  $75,  8  per 
cent  per  month  was  charged  for  interest  and  from  $6.00  to  $7.50 
for  papers ;  while  for  loans  of  $100  or  over  5  per  cent  per  month 
for  interest  and  from  $10  to  $15  for  papers,  etc.,  was  exacted. 
No  partial  payments  were  ever  accepted  on  account  of  principal, 
which  was  to  be  repaid  in  one  lump  sum,  the  charges  above  men- 
tioned being  for  the  use  of  the  money  only.  A  system  of  "ex- 
tension" fees  for  granting  additional  time  on  loans  was  adopted. 

(a)  The  account  of  the  Baltimore  situation  which  follows,  is  taken  from  a 
statement  prepared  for  the  Bureau  of  Social  Research  by  W.  N.  Finley,  manager 
of  the  Chattel  Loan  Association  of  Baltimore. 


WHAT  THE   PHILANTHROPIC    COMPANIES   ARE   DOING.  35 

No  loans  were  made  for  more  than  six  months.  A  typical  case 
is  illustrative  of  the  system:  A.  borrowed  $125  at  5  per  cent  per 
month  for  six  months.  He  was  charged  $10  for  papers,  etc.,  and 
by  force  of  circumstances  had  the  loan  renewed  by  the  same 
money  lender  no  less  than  six  times.  At  the  end  of  the  third  year 
he  had  paid  (exclusive  of  extension  fees)  for  interest  $225;  for 
renewal  fees  (new  mortgages)  $60;  total  $285.  When  he  was 
suddenly  taken  ill  and  was  in  consequence  unable  to  meet  the 
usual  $6.25  monthly  interest  note,  he  received  a  notice  to  the 
effect  that  unless  the  entire  original  sum  borrowed,  $125,  was 
repaid  by  noon  on  the  ensuing  Wednesday,  his  mortgage  would 
be  foreclosed  and  his  furniture  and  effects  sold  to  satisfy  the  debt. 
The  worm  turned  at  last,  but  the  attorney  he  employed  was  not 
as  quick  as  he  should  have  been  and  it  cost  A.  $28  more  to  get 
his  mortgage  released.  The  total  amount  borrowed  was  $125,  the 
total  repaid,  $313,  in  addition  to  further  sums  for  extension  fees. 
Thousands  of  such  loans  were  made  annually  in  Baltimore 
at  enormous  profit  to  the  lender  and  corresponding  discomfort 
and  suffering  to  the  borrower.  These  conditions  continued  for  a 
long  term  of  years  and  naturally  grew  worse ;  in  fact,  no  one 
seemed  to  know  or  care  anything  about  the  state  of  affairs,  until 
in  the  fall  of  1897  the  late  Rev.  Maltbie  B.  Babcock  became  inter- 
ested in  the  matter.  He  set  on  foot  an  investigation  which 
brought  to  light  the  general  situation  as  previously  mentioned. 
Without  loss  of  time  a  meeting  of  business  men  was  called  to  con- 
sider the  situation  and  devise  ways  and  means  of  permanently 
correcting  the  existing  evils.  It  was  finally  determined  to  start 
a  business  organization  which  would  have  for  its  sole  object  the 
lending  of  money  upon  security  of  a  chattel  mortgage,  and  which 
would  charge  only  enough  to  pay  running  expenses  and  a  fair 
dividend  to  its  stockholders.  At  this  meeting  all  needed  capital 
was  quickly  subscribed  and  in  due  time  a  charter  obtained  under 
the  general  incorporation  act  of  Maryland.  The  chartered  capital 
was  $30,000,  all  subscribed  and  half  paid  in.  At  the  end  of  two 
years  the  capital  stock  was  increased  to  $50,000,  and  two  years 
later  to  $75,000.  The  rates  charged  at  the  start  were  experi- 
mental, but  by  the  time  the  legislature  convened  in  1900  it  was 


36  CHATTEL  LOAN   BUSINESS. 

seen  that  they  could  be  lowered,  and  accordingly  the  Loan  Asso- 
ciation proposed  the  first  chattel  act  for  Maryland,  in  which  the 
rates  for  loans  on  furniture  were  fixed  at  a  figure  averaging 
$1.00  less  per  loan  than  the  Association  had  been  charging  from 
the  time  it  began  business.  The  bill  was  passed  without  amend- 
ment and  became  a  law.  After  two  more  years  of  experience 
the  law  was  slightly  amended  in  1902.  This  amended  law  stands 
to-day.  (a)  It  allows  6  per  cent  interest  and  an  additional  in- 
clusive charge  of  $5.00  for  examination  and  valuation  of  prop- 
erty offered  as  security  for  the  loan,  and  for  preparation  of  the 
papers,  where  the  amount  loaned  does  not  exceed  $50;  $6.00 
where  the  amount  exceeds  $50  and  equals  $100  or  less;  5  per 
cent  additional  of  the  excess  over  $100  where  the  amount  loaned 
exceeds  $100  and  equals  $1,000  or  less,  and  2^2  per  cent  addi- 
tional of  the  excess  over  $1,000  where  the  amount  exceeds  $1,000; 
for  additional  papers,  the  amount  actually  paid  for  same.  These 
charges  are  to  be  deducted  at  the  time  of  making  the  loan. 

In  ten  years  the  Association  has  made  over  nine  thousand 
loans,  paid  5  per  cent  on  its  capital  and  1  per  cent  to  surplus.  (b) 
But  the  real  test  of  the  work  of  the  Association  is  found  in  the 
results  produced  in  the  community.  Two  of  the  largest  loan 
offices  in  the  city  have  been  driven  out  of  business ;  a  search  of 
the  dockets  in  both  law  and  equity  courts  proves  that  during  the 
past  four  years  not  a  single  suit  in  either  law  or  equity  has  been 
filed  by  a  victim  of  a  mortgage  money  lender,  nor  has  any  money 
lender  brought  suit  against  a  customer.  It  should  not  be  inferred 
that  there  is  no  extortion  practiced  in  the  city,  but  it  has  been 
very  considerably  reduced.  Several  new  loan  offices  have  been 
opened  since  1902,  where  loans  can  be  obtained  at  the  legal 
rate.  This  experience  shows  that  much  can  be  accomplished  by 
legislation,  but  that  more  real  help  can  be  afforded  by  lending 
money  at  low  rates,  and  that  such  a  business  is  a  fair  paying,  safe 
investment  for  capital. 

The  Loan  Association  of  Baltimore  has  a  counterpart  in  the 
St.  Bartholomew's  Loan  Association  of  211  East  42nd  Street, 
New  York  City.    This  Company,  organized  under  Chapter  326  of 

(a)  Appendix  IV,  page  46. 

(b)  Appendix  VII,  page  52. 


WHAT  THE   PHILANTHROPIC    COMPANIES   ARE   DOING.  37 

the  laws  of  1895,  as  amended,  is  allowed  to  charge  2  per  cent 
a  month  and  $1.00  for  papers  on  loans  of  $50  or  less,  and  $2.00 
on  loans  of  more  than  $50.  It  began  business  thirteen  years  ago, 
charging  il/2  per  cent  a  month  and  $1.00  for  papers,  but  has 
since  reduced  its  interest  charge  to  1  per  cent  per  month.  (a) 

The  Association  never  makes  a  loan  unless  it  is  thought  to  be 
a  good  thing  for  the  applicant,  no  matter  how  valuable  the  se- 
curity may  be.  The  character  of  its  business  is  shown  by  the  fact 
that  its  losses  have  aggregated  less  than  five-eighths  of  one  per 
cent.  Its  business  possibilities  are  revealed  by  the  fact  that  it 
cannot  begin  to  meet  the  demand  for  loans,  there  being  a  long 
waiting  list  of  prospective  borrowers.  The  Association  has  never 
foreclosed  a  mortgage,  unless  it  was  discovered  that  the  bor- 
rower was  intending  to  move  his  furniture  away  and  avoid  pay- 
ing the  loan.  It  has  always  maintained  a  policy  of  leniency,  and 
has  given  the  borrowers  all  the  time  they  needed  in  paying  back 
their  loans.  In  the  last  four  years  the  loans  of  the  Association 
have  aggregated  $290,840. 

The  Citizens'  Mortgage  Loan  Company  of  Cincinnati,  Ohio, 
is  a  similar  agency,  organized  on  the  lines  of  the  Baltimore  Asso- 
ciation, for  the  regulation  of  the  loan  business.  A  number  of 
men  engaged  in  philanthropic  work,  who  investigated  the  chat- 
tel loan  business  in  Cincinnati,  became  convinced  of  the  futility 
of  any  direct  attempt  to  remove  its  evil  and  oppressive  features 
by  legislation  or  exposure  through  the  press.  After  mature  de- 
liberation, they  decided  that  the  only  practical  remedy  was  to 
furnish  an  opportunity  where  those  compelled  to  borrow  on 
chattels  could  do  so  without  becoming  helplessly  engulfed  in 
the  mire  of  debt.  The  Citizens'  Mortgage  Loan  Company  was 
therefore  organized,  with  a  view  to  applying  this  remedy.  That 
they  fully  comprehended  the  situation,  as  well  as  the  possibilities 

(»)  In  the  report  on  the  Salary  Loan  Business  in  New  York  City,  prepared 
by  Mr.  C.  W.  Wassam,  page  90,  a  statement  is  made  that  "the  officers  of  the 
church  have  decided  not  to  extend  the  business.  It  is  their  belief  that  its 
practicability  has  been  demonstrated  from  a  business  standpoint,  and  that  it 
should  be  enlarged  by  an  organization  entirely  separated  from  the  church  ..." 
It  has  recently  been  learned  from  authoritative  sources  that  the  policy  of  the 
church  in  this  matter  is  quite  the  reverse  of  that  reflected  in  this  statement. 
There  is  entire  willingness  on  the  part  of  the  church  authorities  to  expand  as 
rapidly  as  capital  can  be  provided.  It  should  be  said  that  the  misleading 
statement  above  quoted  was  based  on  information  afforded  by  the  manager  of 
the  loan  association. 

For  financial  statement  see  Appendix  VIII,  page  55. 


38 


CHATTEL  LOAN   BUSINESS. 


of  their  experiment,  is  best  told  in  the  business  success  of  the 
company  and  in  the  changes  that  have  been  effected  in  the  loan 
business  in  Cincinnati.  The  usurer  has  not  been  abolished,  but 
his  power  for  evil  has  been  curtailed,  and  he  has  been  compelled 
to  observe  better  business  standards. 

The  Company  was  organized  in  June,  1900,  with  a  capital  of 
$50,000,  since  increased  to  $100,000.  During  the  first  eighteen 
months  the  interest  charged  was  12  per  cent  per  annum,  with  a 
small  expense  for  papers.  At  the  end  of  that  time  it  was  found 
that  the  12  per  cent  rate  could  safely  be  reduced  to  8  per  cent, 
at  which  figure  all  loans  are  now  made.  Even  at  this  rate  the 
company  has  been  able  to  pay  a  5  per  cent  dividend  annually  for 
the  past  four  years.  (a)  Over  13,000  loans,  aggregating  $700,000, 
have  been  made,  and  in  its  entire  business  the  company  has  never 
been  obliged  to  resort  to  a  forcible  sale  of  security  to  satisfy  its 
claims.  The  losses  have  been  less  than  one-half  of  1  per  cent, 
a  fact  which  speaks  volumes  for  the  honorable  and  liberal  policy 
of  the  company  and  the  honesty  of  appreciative  patrons. 

The  following  table  gives  the  company's  rates  in  comparison 
with  those  of  all  others  in  the  city: 


Amount. 

6  Months. 

9  Months. 

One  Year 

$25.00 

50.00 

100.00 

Citizen's 

Loan  Co. 

$3.00 

4.50 

7.50 

All  others. 
$8.00  or  more 
11.00  or  more 
17.00  or  more 

Citizen's 
Loan  Co. 

$5.50 

All  others. 

$16.00 
or  more 

Citizen's 
Loan  Co. 

$11.50 

All  others. 

$34.50 
or  more 

The  Provident  Loan  Society  of  Detroit  has  just  finished  its 
second  year.  Its  rates  are  reasonable  and  its  earnings  sufficient 
to  pay  expenses,  5  per  cent  upon  capital  invested,  and  provide  a 
small  surplus.  As  in  other  cities,  the  excessive  charges  of  money 
lenders  were  the  impelling  cause  which  led  to  the  organization 
of  the  Detroit  company.  Following  a  newspaper  communication 
which  called  attention  to  the  need  of  a  philanthropic  loan  com- 
pany, two  men  talked  together  about  it,  and  after  studying  the 
methods  used,  especially  in  Baltimore  and  Cincinnati,  they  called 
together  a  half  dozen  other  men  of  influence  who  agreed  to  act 


(a)     Appendix  IX,  page  57. 


WHAT  THE   PHILANTHROPIC   COMPANIES   ARE  DOING.  39 

as  directors  and  provide  money  for  the  commencement  of  the 
business.  Because  the  distress  occasioned  by  the  mortgage  loan 
offices  seemed  to  be  greater  than  that  caused  by  the  pawn  shops, 
the  society  has  thus  far  loaned  upon  the  mortgage  rather  than  the 
pledge  of  personal  property. 

Other  companies  of  this  sort  are  the  Workingmen's  Collateral 
Loan  Company  of  Cleveland,  Ohio,  and  the  Workingmen's 
Loan  Association  of  Boston,  Mass. 

The  last  mentioned  company,  charging  i  per  cent  a  month, 
pays  6  per  cent  on  the  investment  and  is  accumulating  a  surplus. 
It  refuses  to  take  some  mortgages  which  other  companies  might 
not  consider  too  risky,  but  it  is  constantly  lending  to  poor  people. 
The  experiences  of  these  companies  prove  that  a  i  per  cent  per 
month  business  may  be  profitable.  Whether  any  salary  loan  com- 
panies could  do  a  profitable  business  at  such  a  rate  has  not  thus 
far  been  demonstrated. 


APPENDIX   I. 

The  New  York  Law.  Chapter  326  of  the  Laws  of  1895,  as 
amended  by  Chapter  78  of  the  Laws  of  1902,  and  Chapter  333  of 
the  Laws  of  1905  : 

AN  ACT  to  provide  for  the  incorporation  of  associations  for  lending 
money  on  personal  property  and  to  forbid  certain  loans  of  money, 
property  or  credit. 

The  People  of  the  State  of  New  York  represented  in  Senate  and 
Assembly  do  enact  as  follows: 

Section  I.  In  any  county  of  this  State  containing  or  which  is  con- 
tained in  an  incorporated  city,  except  in  the  counties  of  Monroe  and 
Westchester,  any  five  or  more  persons  may  organize  and  become  a 
corporation  for  the  purpose  of  aiding  such  persons  as  shall  be  deemed 
in  need  of  pecuniary  assistance  by  loans  of  money  at  interest  not  ex- 
ceeding $200  to  any  one  person,  upon  a  pledge  or  mortgage  of  personal 
property  by  making,  signing,  acknowledging  and  filing  a  certificate  in 
the  form  prescribed  by  the  business  corporation  law.  Before  transact- 
ing any  business,  the  said  corporation  shall  execute  and  file  a  bond 
in  an  amount  equal  to  one-tenth  of  its  capital  stock,  but  not  less  than 
the  sum  of  $5,000,  with  the  Supt.  of  Banks,  to  be  approved  by  him 
for  the  faithful  observance  of  all  general  provisions  of  law  regulating 
business  corporations  within  the  State  of  New  York  and  the  provi- 
sions of  this  act.  Said  bond  shall  be  executed  by  a  domestic  or  for- 
eign corporation,  authorized  by  the  Supt.  of  Insurance  to  transact 
within  the  State  the  business  of  surety  insurance  as  surety.  At  the 
time  of  filing  such  bond,  such  corporation  shall  also  file  with  the  Supt. 
of  Banks  a  certified  copy  of  its  certificate  of  incorporation.  Upon  the 
filing  of  such  certified  copy  of  the  certificate  of  incorporation  and  the 
filing  and  approval  of  the  bond  hereinbefore  provided  for,  the  Supt. 
of  Banks  shall  issue  to  the  corporation  a  license  to  transact  business 
under  this  act,  which  license  shall  terminate  on  the  31st  day  of  March 
in  the  following  calendar  year.  This  act  shall  not  apply  to  the  coun- 
ties of  Monroe  and  Westchester. 

Section  II.  Said  bond  shall  be  renewed  and  refiled  annually  in 
January  of  each  year  and  shall  be  approved  by  the  Supt.  of  Banks  and 
a  new  license  issued  on  or  before  the  first  day  of  March;  or  the  cor- 
poration shall  within  twenty  days  thereafter  cease  doing  business  and 
proceedings  for  a  dissolution  shall  be  instituted  by  the  Attorney  Gen- 


APPENDICES.  41 

eral  at  the  request  of  the  Supt.  of  Banks.  Every  such  corporation  shall 
also  in  January  of  each  year  make  a  report  for  the  previous  calendar 
year  to  the  Supt.  of  Banks,  giving  such  information  as  he  shall  require, 
which  report  shall  be  verified  by  the  oath  of  the  president  or  secretary; 
and  it  shall  make  such  other  and  further  reports  under  the  like  oath 
as  the  said  superintendent  shall  demand  at  any  time.  The  Supt.  of 
Banks  shall  cause  every  such  corporation  to  be  examined  at  least  once 
In  every  year  and  may  cause  it  to  be  examined  as  often  as  he  deems 
it  necessary;  and  it  shall  make  such  other  and  further  reports  under 
the  like  oath  as  the  said  superintendent  shall  demand  at  any  time. 
The  Supt.  of  Banks  shall  cause  every  such  corporation  to  be  examined 
at  least  once  in  every  year  and  may  cause  it  to  be  examined  as  often 
as  he  deems  it  necessary;  and  the  examiners  appointed  by  him  shall 
be  given  free  access  to  all  books,  papers,  securities  and  other  sources 
of  information  in  respect  to  the  said  corporation;  for  which  examina- 
tion a  reasonable  charge  shall  be  imposed  by  the  Supt.  and  paid  by 
the  said  corporation  within  twenty  days  after  notice  of  the  charge 
shall  have  been  mailed  to  the  corporation  at  the  last  address  given 
by  it.  If  any  such  corporation  shall  knowingly  violate  any  of  the 
provisions  or  restrictions  of  this  act,  the  said  bond  shall  be  forfeited 
and  shall  be  collected  by  suit  by  the  Supt.  of  Banks  in  the  name  of 
the  people  of  the  state,  which  suit  shall  be  conducted  by  the  Attor- 
ney General;  and  a  reward  of  $250  shall  be  paid  by  the  state  to  the 
person  first  giving  information  and  furnishing  legal  proof  of  such  vio- 
lation. Corporations  organized  under  the  provisions  of  this  act  shall 
be  subject  to  the  supervision  of  the  Supt.  of  Banks;  and  the  general 
provisions  relative  to  the  supervision  of  moneyed  corporations  con- 
tained in  Article  I  of  the  Banking  Law  shall  be  applicable  to  them, 
in  so  far  as  they  are  not  inconsistent  with  the  provisions  of  this  act. 
All  expenses  incurred  by  the  Supt.  of  Banks  in  preparing  and  furnish- 
ing suitable  blanks,  stationery  and  forms,  in  preparing  and  keeping 
suitable  records,  £or  clerical  service  and  such  other  expenses  as 
may  be  Incident  to  such  supervision,  shall  be  paid  by  said  corporations 
in  such  proportions  as  the  Supt.  may  deem  just  and  reasonable.  The 
expenses  incurred  and  the  services  performed  on  account  of  any  such 
corporation  shall  be  charged  to  and  paid  by  the  corporation  for  whom 
they  were  incurred  and  performed.  All  moneys  received  by  him  in  pay- 
ment of  such  charges  shall  be  deposited  and  paid  by  him  into  the 
Treasury  of  the  state  to  reimburse  all  sums  advanced  from  the  Treas- 
ury for  such  expenses.  If  any  such  corporation  shall  fail  to  pay  such 
charges  as  herein  required,  including  charges  for  examination,  the 
Supt.  shall  report  to  the  Attorney  General  the  failure  of  any  such 
corporation  to  pay  such  charges  and  the  Attorney  General  shall  there- 
upon bring  an  action  in  the  name  of  the  people  for  the  recovery  of 
such  charges.  All  such  charges,  including  the  charges  made  for  ex- 
amination shall  be  a  preferred  claim  against  the  assets  of  any  such 
corporation  upon  its  dissolution  or  upon  its  making  a  general  assign- 
ment for  the  benefit  of  creditors.  If  it  shall  appear  to  the  Supt.  of 
Banks  from  any  examination  or  report  that  the  capital  stock  of  any 
such  corporation  is  Impaired,  or  that  it  has  violated  its  charter  or  any 
law  of  this  state;  or  is  conducting  its  business  in  an  oppressive  or 
unauthorized  manner;  or  is  by  payment  of  excessive  salaries,  excessive 
rents  or  any  other  means,  attempting  to  evade  the  provisions  of  this 
act  relative  to  a  reduction  in  the  rate  of  interest,  which  such  corpora- 


42  CHATTEL  LOAN  BUSINESS. 

tion  may  legally  charge,  he  may,  by  an  order  made  over  his  hand  and 
official  seal,  direct  any  such  corporation  to  make  good  such  impair- 
ment of  capital;  or  to  discontinue  the  illegal,  oppressive  or  unauthor- 
ized methods  and  practices  mentioned  in  such  order;  or  to  discon- 
tinue the  payment  of  the  excessive  salaries,  rents  or  other  expenses, 
by  means  of  which  an  attempt  to  evade  the  provisions  of  this  act  is 
apparent.  If  any  such  corporation  shall  not  comply  with  such  order 
within  twenty  days  after  the  same  shall  have  been  mailed  to  the  last 
address  filed  by  such  corporation  in  the  banking  department,  the  Supt. 
shall  communicate  the  facts  to  the  Attorney  General,  who  shall  there- 
upon commence  an  action  for  the  dissolution  of  the  corporation;  and 
the  corporation  shall  upon  proof  of  failure  to  comply  with  such  order 
be  dissolved  and  a  permanent  receiver  therefor  appointed. 

Section  III.  Every  such  corporation  shall  have  the  general  powers 
of  a  business  corporation  as  provided  by  law  and  shall  be  subject  to 
all  the  duties,  obligations  and  restrictions  of  a  business  corporation 
so  far  as  applicable  thereto  and  shall  have  the  following  additional 
powers:  It  shall  be  entitled  to  act  as  pawnbroker  within  such  county 
and  shall  be  subject  to  and  entitled  to  all  the  benefits  and  provisions 
of  the  laws  of  the  state  and  of  all  ordinances  of  the  city  in  which  it 
is  located  concerning  pawnbrokers;  except  that  it  shall  not  be  re- 
quired to  obtain  a  license  or  file  any  bond  other  than  that  provided 
for  in  the  first  section  of  this  act,  and  it  may  lend  money  to  such 
persons  within  such  county  as  shall  be  deemed  by  it  in  need  of  pecun- 
iary assistance  and  may  take  as  security  for  the  payment  of  any  such 
loan  either  a  pledge  or  a  mortgage  of  any  personal  property  without 
the  actual  delivery  to  it  of  the  property  pledged  or  mortgaged  together 
with  other  lawful  securities.  It  shall  be  entitled  to  charge  and  receive 
upon  each  loan  made  by  it  without  the  actual  delivery  to  it  of  the  prop- 
erty pledged  or  mortgaged,  which  charge  shall  include  all  services  of 
every  character  in  connection  with  said  loan,  except  upon  the  fore- 
closure of  its  security,  interest  or  discount  at  a  rate  not  exceeding 
two  percentum  per  month.  It  may  also  charge  for  the  first  examina- 
tion of  the  property  to  be  pledged  or  mortgaged  and  for  drawing  and 
filing  the  necessary  papers  and  for  all  other  expenses  a  sum  not  ex- 
ceeding $2,  if  a  loan  of  more  than  §50  shall  actually  be  made,  and  a 
sum  not  exceeding  $1  if  a  loan  of  $50  or  less  shall  actually  be  made; 
but  no  further  charge  for  examination  of  the  property  or  for  drawing 
or  filing  papers  or  for  any  services  or  expenses  or  upon  any  pretext 
whatsoever,  beyond  the  said  charge  for  interest  or  discount  shall  be 
made  upon  any  renewal  or  extension  of  the  loan  or  any  transfer  or 
change  of  the  loan  or  upon  any  other  occasion  within  one  year  from 
the  date  of  the  original  loan  or  oftener  than  once  in  each  period  of 
twelve  months  thereafter.  No  loan  greater  than  $200  shall  be  made 
under  the  authority  of  this  section,  nor  shall  any  one  person  owe 
any  such  corporation  more  than  $200  for  principal  at  one  time. 

Section  IV.  No  such  corporation  shall  in  any  year  declare  or  pay 
dividends  on  its  capital  stock  amounting  to  more  than  ten  percentum. 
The  Supt.  of  Banks,  upon  ascertaining  that  any  such  corporation  has, 
during  the  previous  calendar  year,  made  a  net  profit  amounting  to 
more  than  ten  percentum  on  its  capital,  shall  have  authority,  after  ten 
days'  notice  to  the  corporation,  to  make  an  order  reducing  the  rates 


APPENDICES. 


43 


of  interest,  discount  and  charges  which  such  corporation  may  lawfully 
charge  or  receive  upon  loans,  to  such  sums  as  will  in  his  judgment 
produce  a  net  return  of  ten  percentum  on  its  capital  stock.  Any  order 
made  under  this  section  shall  take  effect  at  such  time  not  less  than 
one  month  after  it  is  made  as  the  order  shall  name  and  shall  remain 
in  force  until  revoked.  Except  in  the  City  of  New  York,  no  such 
corporation  shall  make  any  loan  in  any  other  county  than  that  in  which 
its  principal  business  office  is  located,  nor  take  securities  on  property 
located  in  any  other  counties. 

Section  V.  In  any  such  county  no  person  or  corporation  other  than 
corporations  organized  pursuant  to  this  act  shall  directly  or  indi- 
rectly charge  or  receive  any  interest,  discount  or  consideration  greater 
than  the  legal  rate  of  interest  upon  the  loan,  use,  or  forbearance  of 
money,  goods  or  things  in  action,  less  than  $200.  in  amount  of  value, 
or  upon  the  loan,  use,  or  sale  of  personal  credit  in  any  wise,  where 
there  is  taken  for  such  loan,  use  or  sale  of  personal  credit,  any  secur- 
ity upon  any  household  furniture,  apparatus  or  appliances,  sewing 
machine,  plate  or  silverware  in  actual  use,  tools  or  implements  of 
trade,  wearing  apparel  or  jewelry.  The  foregoing  prohibition  shall 
apply  to  any  person  who,  as  security  for  any  such  loan,  use  or  for- 
bearance of  money  or  for  any  such  loan,  use  or  sale  of  personal  credit 
as  aforesaid,  makes  a  pretended  purchase  of  property  from  any  person 
and  permits  the  owner  or  pledgor  to  retain  the  possession  thereof,  or 
who,  by  any  device  or  pretense  of  charging  for  his  services  or  other- 
wise, seeks  to  obtain  a  larger  compensation  in  any  case  hereinbefore 
provided  for.  Any  person  and  the  several  officers  of  any  corporation 
who  shall  violate  the  foregoing  prohibition  shall  be  guilty  of  a  mis- 
demeanor and  upon  proof  of  such  fact,  the  debt  shall  be  discharged 
and  the  security  shall  be  void.  But  this  Section  shall  not  apply  to 
licensed  pawnbrokers  making  loans  upon  the  actual  and  permanent 
deposit  of  personal  property  as  security,  nor  shall  this  section  affect 
in  any  way  the  validity  or  legality  of  any  loan  of  money  or  credit 
exceeding  $200  in  amount. 


APPENDIX  II. 

Provision  of  the  Penal  Code  of  New  York  : 

Section  378.  A  person  who  takes  security  upon  any  household 
furniture,  sewing  machines,  plate  or  silverware  in  actual  use,  tools  or 
implements  of  trade,  wearing  apparel  or  jewelry,  for  a  loan  or  for- 
bearance of  money  or  for  the  use  or  sale  of  his  personal  credit,  condi- 
tioned upon  the  payment  of  a  greater  rate  than  six  percentum  per 
annum,  or  who,  as  security  for  such  loan,  use  or  sale  of  personal 
credit,  as  aforesaid,  makes  a  pretended  purchase  of  such  property 
from  any  person  upon  the  like  condition,  and  permits  the  pledger  to 
retain  the  possession  thereof,  is  guilty  of  a  misdemeanor. 


APPENDIX  III. 

The  Business  Corporation  Law  of  New  York.     Chapter  460 
of  the  Laws  of  1896  : 

Section  II.  Three  or  more  persons  may  become  a  stock  corpora- 
tion for  any  lawful  business  purpose  or  purposes  other  than  a  moneyed 
corporation  or  a  corporation  provided  for  by  the  banking,  the  insur- 
ance, the  railroad  and  the  transportation  corporation  laws,  by  making, 
signing,  acknowledging  and  filing  a  certificate  which  shall  contain: 

1.  The  name  of  the  proposed  corporation. 

2.  The  purpose  or  purposes  for  which  it  is  to  be  formed. 

3.  The  amount  of  the  capital  stock  and  if  any  portion  be  pre- 
ferred stock,  the  preferences  thereof. 

4.  The  number  of  shares  of  which  the  capital  stock  shall  con- 
sist, each  of  which  shall  not  be  less  than  five  nor  more  than  one 
hundred  dollars,  and  the  amount  of  capital  not  less  than  $500  with 
which  said  corporation  will  begin  business. 

5.  The  city,  village,  or  town  in  which  its  principal  business  office 
is  to  be  located. 

6.  Its  duration. 

7.  The  number  of  its  directors,  not  less  than  three  nor  more  than 
thirteen. 

8.  The  names  and  post  office  addresses  of  the  directors  for  the 
first  year. 

9.  The  names  and  post,  office  addresses  of  the  subscribers  and  a 
statement  of  the  number  of  shares  of  stock  which  each  agrees  to  take 
in  the  corporation. 

The  certificate  may  contain  any  other  provisions  for  the  regulation 
of  the  business  and  the  conduct  of  the  affairs  of  the  corporation,  and 
any  limitation  upon  its  powers  and  upon  the  powers  of  its  directors 
and  stockholders  which  does  not  exempt  them  from  any  obligation  or 
from  the  performance  of  any  duty  imposed  by  law. 


APPENDIX  IV. 

The  Maryland  Law.     Chapter  208  of  the  Laws  of  1902  : 

AN  ACT  regulating  the  loan  of  money,  when,  as  security  for  such  loan,, 
a  lien  is  taken  upon  household  furniture  and  effects,  musical  in- 
struments, typewriters  and  sewing  machines,  in  use  or  located  in 
any  dwelling  house,  by  repealing  and  re-enacting  with  amend- 
ments Section  7  of  Article  49,  of  Code  of  Public  General  Laws,  title 
"Interest  and  Usury,"  as  the  same  was  re-enacted  by  Chapter  404 
of  the  Acts  of  the  General  Assembly  of  Maryland,  passed  at  its 
January  session  in  the  year  1900. 

Section  1.  Be  It  Enacted  by  the  General  Assembly  of  Maryland, 
that  Section  7  of  Article  49,  of  the  Code  of  Public  General  Laws,  title 
"Interest  and  Usury,"  as  the  same  was  enacted  by  Chapter  404,  of  the 
Acts  of  the  General  Assembly  of  Maryland,  passed  at  its  January 
session  in  the  year  1900,  be  and  the  same  is  hereby  repealed  and  re- 
enacted,  so  as  to  read  as  follows: 

Section  7.  It  shall  not  be  lawful  for  any  individual,  partnership, 
association  or  corporation  lending  money  within  the  limits  of  this 
State,  and  taking  as  security  for  the  repayment  thereof,  a  lien  upon 
any  household  furniture  and  effects,  musical  instruments,  typewriters 
and  sewing  machines  or  any  other  personal  chattels,  whether  such 
lien  shall  be  in  the  nature  of  a  conditional  sale,  chattel  mortgage,  bill 
of  sale,  whether  recorded  or  unrecorded,  or  any  other  lien  of  any 
character  whatsoever,  to  have  or  charge  for  the  use  of  money  so  loaned 
more  than  the  lawful  rate  of  interest  thereon,  as  fixed  by  the  provisions 
of  Section  57  of  Article  3  of  the  Constitution  of  the  State  of  Maryland, 
and  that  no  additional  sums  either  in  the  way  of  bonus  or  otherwise, 
shall  be  required  or  exacted  of  the  borrower  or  borrowers;  and  further, 
that  no  charges  for  examination  or  valuation  of  property  offered,  in- 
surance of  same,  and  preparation,  execution  and  recording  of  neces- 
sary papers  shall  be  imposed,  except  as  follows:  For  examination  or 
valuation  of  property  offered  for  security  for  loan  and  preparation  of 
papers  (both  included),  the  sum  of  five  dollars,  where  the  amount 
loaned  does  not  exceed  fifty  dollars;  six  dollars  where  the  amount  ex- 
ceeds fifty  dollars  and  equals  one  hundred  dollars  or  less;  and  five 
per  centum  additional  of  the  excess  over  one  hundred  dollars,  where 
the  amount  loaned  exceeds  one  hundred  dollars  and  equals  one  thou- 
sand dollars  or  less;  and  two  and  one-half  per  centum  additional  of 
the  excess  over  one  thousand  dollars  where  the  amount  loaned  exceeds 
one  thousand  dollars;    for  necessary  affidavits,  recording  papers,  rev- 


APPENDICES.  47 

enue  stamps  and  fire  insurance  premiums  the  amount  actually  to  be 
paid  for  same:  provided,  that  the  foregoing  charges  and  interest  as 
herein  provided  may  be  deducted  from  the  principal  of  the  loan  when 
the  same  is  made;  and  provided  further  that  it  shall  not  be  lawful  to 
make  any  charges  for  renewals  or  extensions  of  loans,  nor  to  divide 
nor  split  up  loans  under  any  pretext  whatsoever  for  the  purpose  of 
requiring  or  exacting  any  other  or  greater  charges  than  prescribed 
herein;  and  provided  that  where  a  loan  is  paid  off  before  maturity,  in- 
terest shall  be  rebated  to  the  borrower  or  borrowers  at  the  rate  of 
six  per  centum  on  the  amount  so  paid,  and  any  violation  of  the  provi- 
sions of  this  Act  shall  be  a  misdemeanor,  and  punishable  by  a  fine 
of  one  hundred  dollars  for  the  first  offense,  and  of  a  like  fine  and  im- 
prisonment in  jail  for  thirty  days  for  the  second  and  each  subsequent 
offense;  and,  further,  the  entire  amount  loaned  shall  be  forfeited  to 
the  borrower  or  borrowers,  and  the  mortgage  therefor  given  becomes 
null  and  void. 

Section  2.    And  he  It  Enacted,  That  this  Act  shall  take  effect  from 
the  date  of  its  passage. 


APPENDIX  V. 

The  New  Jersey  Law.     Chapter  96  of  the  Laws  of  1904  : 

AN  ACT  to  provide  for  the  incorporation  and  regulation  of  Provident 
loan  associations. 

Provident  Loan  Associations  Mat  Be  Formed.  1.  Upon  executing, 
recording  and  filing  a  certificate  pursuant  to  this  act  any  three  or  more 
persons,  citizens  of  this  state,  may  become  an  incorporated  association 
for  the  purpose  of  aiding  such  persons  as  shall  be  deemed  in  need 
of  pecuniary  assistance  by  loans  of  money,  at  interest,  not  exceeding 
two  hundred  dollars  to  any  one  person,  upon  a  pledge  or  mortgage 
of  personal  property. 

Certificate  of  Incorporation.  2.  The  certificate  of  incorporation 
shall  be  signed  in  person  by  all  the  subscribers  to  the  stock  named 
therein,  and  shall  set  forth: 

I.     The  name  of  the  association; 

II.  The  city  or  other  municipality  where  it  is  to  be  located  and  its 
business  transacted,  which  shall  be  within  this  state; 

III.  The  object  for  which  it  is  formed; 

IV.  The  amount  of  the  total  authorized  capital  stock  of  the  asso- 
ciation, which  shall  not  be  less  than  two  thousand  dollars,  and  the 
number  of  shares  into  which  the  same  is  divided,  and  the  par  value 
of  each  share;  the  amount  of  capital  stock  with  which  it  is  to  com- 
mence business,  which  shall  not  be  less  than  one  thousand  dollars; 
also  the.  number  of  shares  subscribed  for  by  each  of  the  incorporators. 

Name.  3.  The  name  assumed  by  any  such  association  shall  not  be 
so  nearly  like  that  of  any  other  association  as  to  deceive  the  public 
and  the  words  "Provident  Loan  Association"  shall  form  a  part  thereof, 
and  such  name  shall  be  approved  by  the  commissioner  of  banking  and 
insurance. 

Certificates  to  Be  Recorded  and  Filed.  4.  The  certificate  of  in- 
corporation shall  be  proved  or  acknowledged  as  required  for  deeds 
of  lands  and  recorded  in  the  office  of  the  clerk  of  the  county  where  the 
association  is  located,  and  after  being  so  recorded  shall  be  filed  in  the 
department  of  banking  and  insurance,  and  said  certificate,  or  a  copy 
thereof,  duly  certified  by  the  commissioner  of  banking  and  insurance, 
shall  be  evidence  in  all  courts  and  places;  upon  making,  recording  and 
filing  such  certificate  the  persons  so  associated  and  their  successors 
and  assigns  shall,  from  the  date  of  such  filing,  constitute  a  body  cor- 


APPENDICES.  49 

porate  by  the  name  set  forth  in  such  certificate,  with  all  the  powers 
mentioned  in  the  first  section  of  the  act  entitled  "An  act  concerning 
corporations"  [Revision  of  1896],  except  such  powers  as  may  be  incon- 
sistent with  the  provisions  of  this  act. 

Birectobs.  5.  The  business  of  every  such  association  shall  be  man- 
aged by  its  directors,  who  shall  respectively  be  shareholders  thereof; 
they  shall  be  not  less  than  three  in  number,  and  shall  be  chosen  an- 
nually by  the  stockholders  at  the  time  and  place  provided  in  the 
by-laws,  and  shall  hold  office  for  one  year  and  until  others  are  chosen 
and  qualify  in  their  stead. 

Officers.  6.  Every  such  association  shall  have  a  president,  sec- 
retary and  treasurer,  who  shall  be  chosen  by  the  directors,  and  shall 
hold  their  offices  until  others  are  chosen  and  qualify  in  their  stead; 
the  president  shall  be  chosen  from  among  the  directors;  the  secretary 
shall  be  sworn  to  the  faithful  discharge  of  his  duty  and  shall  record 
all  the  votes  of  association  and  directors  in  a  book  to  be  kept  for  that 
purpose,  and  perform  such  other  duties  as  shall  be  assigned  to  him; 
the  treasurer  shall  give  bond  in  such  sum  and  with  such  surety  or 
sureties  as  shall  be  required  by  the  by-laws  for  the  faithful  discharge 
of  his  duties;  the  association  shall  have  such  other  officers,  agents  and 
factors,  who  shall  be  chosen  in  such  manner  and  hold  their  office  for 
such  term,  as  shall  be  prescribed  by  the  by-laws;  all  vacancies  in  the 
board  of  directors  or  any  office  shall  be  filled  by  the  board  for  the  un- 
expired term. 

Associations  Subject  To  Act  Concerning  Coeporations.  7.  Every 
such  association  shall  be  subject  to  and  governed  by  the  provisions  of 
"An  act  concerning  corporations"  [Revision  of  1896],  as  to  its  first 
meeting,  the  right  of  stockholders  to  vote  by  proxy,  certificates  of 
stock  and  their  transfer,  the  liability  of  stockholders  for  unpaid  sub- 
scriptions to  stock  and  the  method  of  enforcing  the  same,  amendments 
to  the  certificate  of  incorporation,  the  increase  and  decrease  of  its 
capital  stock,  its  voluntary  dissolution,  stockholders'  meetings,  election 
of  directors,  insolvency  proceedings,  receivership  and  distribution  of 
its  assets;  except  that  all  certificates  required  to  be  filed  by  it  shall  be 
filed  with  the  commissioner  of  banking  and  insurance. 

Powers.  8.  Every  such  association  shall  have  the  general  powers 
of  a  corporation  formed  under  the  "Act  concerning  corporations"  [Re- 
vision of  1896],  and  shall  be  subject  to  all  the  duties,  obligations  and 
restrictions  of  such  a  corporation  so  far  as  applicable  thereto,  and 
shall  have  the  following  additional  powers:  It  shall  be  entitled  to  act 
as  pawnbroker,  and  shall  be  subject  to  and  entitled  to  all  the  benefits 
of  all  the  provisions  of  the  laws  of  this  state  concerning  pawnbrokers, 
except  it  shall  not  be  required  to  obtain  a  license  and  file  bond;  it 
may  loan  money  to  such  persons  as  shall  be  deemed  to  be  in  need  of 
pecuniary  assistance,  and  may  take  as  security  for  the  payment  of 
any  such  loan  either  a  pledge  or  mortgage  on  personal  property,  to- 
gether with  other  lawful  securities;  it  shall  be  entitled  to  charge  and 
receive  on  each  loan  made  by  it  interest  or  discount  at  a  rate  not 
exceeding  two  per  centum  per  month  for  a  period  of  two  months  or 
less  and  not  exceeding  one  and  one-half  per  centum  per  month  for  any 
period  after  two  months;  but  no  such  loan  greater  than  two  hundred 
dollars  shall  be  made,  nor  shall  any  one  person  owe  such  association 
more  than  two  hundred  dollars  of  principal  at  any  one  time!  "no  direc- 


50  CHATTEL  LOAN   BUSINESS. 

tor  of  any  such  association  shall  receive  any  compensation  for  his  ser- 
vices, either  as  a  director  or  as  an  officer,  nor  shall  any  director  or 
stockholder  be  personally  liable  for  any  debt  incurred  by  the  associa- 
tion. 

Dividends.  When  Rates  for  Loans  May  Be  Reduced  by  Commis- 
sioner. 9.  No  such  association  shall  in  any  year  declare  or  pay  divi- 
dends on  its  capital  stock  amounting  to  more  than  six  per  centum; 
after  any  such  association  shall  have  accumulated  a  surplus  amounting 
to  fifteen  per  centum  of  its  capital,  the  commissioner  of  banking  and 
insurance  shall,  upon  ascertaining  that  such  association  has,  during 
the  previous  calendar  year,  made  a  net  profit  amounting  to  more  than 
six  per  centum  on  its  capital,  have  authority  to  make  an  order  reduc- 
ing the  rate  of  interest,  discount  and  charges  which  said  association 
may  lawfully  charge  and  receive  upon  loans,  to  such  sums  as  may, 
in  his  judgment,  produce  the  net  return  of  six  per  centum  on  its  capital 
stock;  any  such  order  shall  take  effect  at  such  time,  not  less  than  four 
months  after  it  is  made,  as  the  order  shall  name,  and  shall  be  in  force 
for  one  year  unless  sooner  revoked. 

Reports  Required.  10.  Every  such  association  shall  in  the  month 
of  January  in  each  year  file  in  the  department  of  banking  and  insur- 
ance on  blanks  to  be  provided  by  the  commissioner  of  banking  and 
insurance,  a  report  of  its  transactions,  affairs  and  financial  condition 
at  the  close  of  business  at  the  end  of  the  preceding  calendar  year,  such 
report  to  be  verified  by  the  oaths  of  such  officers  and  other  persons  as 
the  commissioner  of  banking  and  insurance  may  designate;  and  the 
said  commissioner  may  call  for  additional  reports  whenever  he  shall 
deem  it  expedient. 

Examinations  and  Proceedings  Thereon.  11.  The  commissioner 
of  banking  and  insurance  may  also,  at  any  time,  make  or  cause  to 
be  made  an  examination  of  the  condition,  business  and  affairs  of  any 
such  association  as  often  as  he  deems  it  necessary;  if  it  shall  appear 
to  the  commissioner  of  banking  and  insurance  from  any  such  examina- 
tion or  report  that  any  such  association  is  insolvent  or  has  violated 
any  of  the  provisions  of  this  act  or  of  any  law  of  this  state,  or  is  con- 
ducting its  business  in  an  oppressive  or  unauthorized  manner,  or  has 
by  tho  payment  of  excessive  salaries,  excessive  rents,  or  by  any  other 
means  attempted  to  evade  the  provisions  of  this  act  relative  to  a  reduc- 
tion in  the  rate  of  interest  which  such  association  may  legally  charge, 
he  may  direct  such  association  to  discontinue  or  correct  its  objection- 
able methods  and  practices,  and  upon  such  association  failing  to  com- 
ply with  such  directions,  within  a  reasonable  time,  the  attorney-general 
of  this  state,  upon  request  of  such  commissioner,  may  take  proceedings 
in  chancery  for  the  dissolution  of  said  association,  which  court  shall 
have  power  to  dissolve  the  same  and  appoint  a  receiver  of  its  assets. 

Fees.  12.  Every  such  association  shall  pay  to  the  commissioner  of 
banking  and  insurance,  for  the  use  of  the  state,  the  sum  of  ten  dollars 
for  filing  its  annual  report,  and  shall  defray  the  expenses  of  any  exami- 
nation of  its  affairs  as  provided  in  this  act,  and'  the  said  commissioner 
may  maintain  an  action  for  the  recovery  of  such  expenses  in  any  court 
of   competent  jurisdiction. 

13.    This  act  shall  take  effect  immediately. 

Approved  March  28,  1904. 


APPENDIX  VI. 

List  of  the  More  Important  Chattel   Mortgage  Loan  Com- 
panies operating-  in  New  York  City  : 

Anchor  Realty  Company,  31  West  42nd  Street. 

Acme  Security  Company,  289  Fourth  Avenue. 

Ariston  Realty  Company,  110  West  34th  Street. 

Adelphi  Realty  Company,  116  Nassau  Street  and  20  E.  120th  Street. 

Broadway  Securities  Company,  1181  Broadway. 

Leslie  Realty  Company,  143  West  125th  Street. 

Riverside  Security  Company,  271  West  125th  Street. 

City  Credit  Company,  621  Broadway. 

Bryant,   140  West  42nd   Street. 

Blakely,  101  West  66th  Street. 

Broadway  Realty  Company,  637  Broadway,  Brooklyn. 

Fidelity  Loan  Association,  140  Nassau  Street. 

Falk,  1451  Broadway. 

Times  Square  Realty  Company,  Broadway  and  41st  Street. 

Industrial  Realty  Company,  375  Fulton  Street,  Brooklyn. 

London  Realty  Company,   1265  Broadway,  and   150  Nassau   Street. 

Lion  Realty  Company,  356  Fulton  St.,  Brooklyn. 

Minerva  Realty  Company,  302  Broadway. 

New  Prospect  Realty  Company,  44  Court  St.,  Brooklyn. 

St.  Bartholomew's  Loan  Association,  211  East  42nd  Street. 

Seifl,  217  West  125th  Street. 

Ussiker,  140  Nassau  Street. 


APPENDIX  VII. 

Financial  Statements  of  the  Chattel  Loan  Association  of  Balti- 
more City: 

1907. 

For  year  of  September  30,  1907.— October  1,  1906,  to  September  30,  1907. 

Earnings  year  ending  September  30,  1907: 

From  Fees     $7,407 .  17 

Interest     2,571.84 

Interest   on    Extensions 463 .  15 

Recording    risk    633 .  60 


Gross    Earnings     $11,075 .  76 

Expenses  : 

Printing  and   Stationery  Acc't $270.89 

Expense     625 . 94 

Stamp     107 .  16 

Legal    Expense    277 .  05 

Advertising     1,233 .  66 

Salary     3,554.00 

Rent     684.00 

Carfare     91 .  74 

Loss     409 .95 

Insurance     105 . 91 


Expenses   exclusive   of  taxes 7,360.30 

Taxes     205.15 


Gross   expenses    $7,565 .  45 

Dividend  No.  15,  paid  April,  1907 1,692.63 

Available  for  Dividend  No.  16 1,538 .  75 

Added  to  undivided  profits 278.93 

$11,075.76 


APPENDICES.  53 

Analysis  of  earning  year  ending  September  30,  1908: 

Dividend  No.       ,  2%  per  cent $1,692.63 

Taxes     205 .  15 

Losses     409 . 95 

Available  for  Dividend  No.     ,  2%  per  cent.  1,538.75 

Added  to  undivided  profits 278 .  93 


$4,125.41 


The    net    earnings    available    for    dividends    for 
year  ending  September  30,  1907,  have  been  for 
six  months  ending  April  1st,  for  Dividend  15.  .    $1,692.63 
added  to  undivided   profits 242.25 

And  for  six  months  ending  September  30,  1907, 

available  for  Dividend  No.  16 1,538.75 

and  added  to  undivided  profits 36.68 


$3,510.31 


Number  of  loans  made  this  year,   1,182. 

Amount  loaned,    $95,379.52. 

Amount  repaid,    $96,287.26. 

Outstanding  loans  September  30,  1907, 

For  a  total  of  $57,142.80,  an  average  of  $65.61  per  loan. 

Average  amount  loaned  per  month,    $7,948.30. 

Average  amount  repaid  per  month,    $8,023.94. 

Average  number  of  loans  made  per  month,    98%. 


1908. 
For  year  of  September  30,  1908.— October  1,  1907,  to  September  30,  1908. 

Earnings  year  ending  September  30,  1908: 

Balance  from  last  year,  undivided  profits $274.93 

From  Fees     $7,455 .  64 

Interest     2,411 .96 

"       Interest    on    Extensions 157.66 

"       Recording   risk    545.55    $10,845.74 


Gross   earnings    $10,845 . 74 


Expenses : 

Printing  and   Stationery  Acc't 259.23 

Expense     802 .  10 

Stamp     101.80 

Legal    expense    213 .  29 

Advertising     926 .  79 


54  CHATTEL  LOAN  BUSINESS. 

Salary     3,839 .  15 

Rent     684.00 

Carfare     102 . 31 

Loss     398 .  79 

Furniture  and  Fixtures    218 .  75 


Expenses  exclusive  of  taxes $7,546.21 

Taxes     211.64 


Gross   expenses    $7,757 .  85 

Dividend  No.  17,  paid  4/10/08 1,538 .  75 

Available  for  dividend  No.  18 1,538 .  75 

Added  to  undivided   profits 10.39 


$10,845.74 

Analysis  of  earning  year  ending  September  30,  1908: 

Dividend  No.  17,  2%  per  cent $1,538.75 

Taxes     211 .  64 

Losses     398 . 79 

Available  for  dividend  No.  18 1,538.75 

Added  to  undivided  profits 10.39 


$3,698.32 

The  net  earnings  available  for  dividends  for 
year  ending  September  30,  1908,  have  been  for 
six    months    ending    April    1st,    for    Dividend 

No.    17    $1,538.75 

added  to  undivided  profits 292.37 

And  for  six  months  ending  September  30,  1908, 

available  for  Dividend  No.  18 1,538.75 

and  added  to  undivided  profits 10.39 


$3,380.26 
Number  of  loans  made  this  year,  1,210. 
Amount  loaned,  $91,739.91. 
Amount  repaid,  $91,932.85. 
Outstanding  loans  September  30,  1908,    877. 
For  a  total  of  $56,949.86,  an  average  of  $64.94  per  loan. 
Average  amount  loaned  per  month,    $7,644.99. 
Average  amount  repaid  per  month,   $7,661.07. 
Average  number  of  loans  made  per  month,   101. 

Memoranda:     Ten  and  one  half  years'  work — May  13,  1898,  to  Sep- 
tember 30,  1908: 

Loans  made,  9,709.     Total  amount  loaned $881,663.01 

Loans  closed,  8,832.     Total  amount  repaid 824,713.15 


Total  amount  of  money  handled $1,706,376.16 

Total  open,  877.  Amount  outstanding  loans,  $56,949.86;  an  aver- 
age of  $64.94  each. 

Eighteen  dividends  paid  (including  next  dividend),  $25,704.73,  or 
86  per  cent,  of  our  original  capital  of  $30,000 — and  42  per  cent,  of  our 
present  capital,  $61,550.00. 


APPENDIX  VIII. 

Report  of  the  Treasurer  of  the  St.  Bartholomew's  Loan  Asso- 
ciation of  New  York  for  the  year  ending  October  31,  1907: 

Balance,  October  31,  1906 $6,810.58 

Receipts. 

Installments  on  Loans    $92,175 .  50 

Interest  on  Loans   9,145 .  81 

Fees  on  Loans   1,822 .  00 

Fees  on  Applications   Declined 89 .  00 

Interest    on    Deposits 63.70     103,296.01 


$110,106.59 


Disbursements. 

For  1,023  Loans    $99,654.00 

Stationery  and  Printing  185 .  66 

Filing  and   Searches    263 .  20 

Postage    162.00 

Car  Fares    117 .  60 

Salaries     5,698 .  09 

General   Expenses    352 . 00 

Application  Fees  Returned    16.00 

State  Examination  and  Tax 198 .  66 

Dividends  paid,  6  per  cent 2,416.50 

Advances  to  Borrowers    184 .  45 

Balance  in  Bank  October  31,  1907 858 .  43 


$110,106.59 


Earnings. 

Interest  on  Loans   $9,331 .  52 

Fees  on  Loans   1,801 .  00 

Interest  on  Deposits    63 .  70 

Application  Fees  Declined   89 .  00 


$11,285.22 


56  CHATTEL  LOAN  BUSINESS. 

Expenses. 

Salaries     $5,698 .  09 

Postage     162 . 00 

State  Examination  and  Tax 198.66 

Filing  and  Searches   263 .  20 

General    Expenses    352 .  00 

Stationery  and  Printing 185 .  66 

Car  Fares  117 .  60 

$6,977.21 

Net    Earnings    $4,308.01 

$11,285.22 

William  A.  Greer, 
Treasurer. 


APPENDIX  IX. 

Financial  Statement  of  the  Citizens'  Mortgage  Loan  Company 
of  Cincinnati,  December  31,  1907: 

Profit  and  Loss. 

Preliminary  fees,   interest  and   expense  charged 

on    loans    $15,215 .  28 

Profit  and  loss  collections 201.70 

Total     $15,416.98    $15,416.98 

From  which  deduct — 

Preliminary  fee  returned    $1 .  25 

Interest  returned    1,384.95 

Total     $1,386.20      $1,386.20 

Gross   earnings    $14,030 .  78 

General  operating  expense $6,525 .  10 

Advertising     1,286 .  70 

Tax  and  fee    477 .  40 

Loss  and  loans    270 .  20 

Depreciation  in  furniture  and  fixtures 147.50 

Total     $8,706.90      $8,706.90 

Net  earnings  for  1907 $5,323 .  88 

Assets  and  Liabilities. 

Assets. 

Outstanding    with    borrowers $75,739 .  00 

Cash     1,487.17 

Furniture  and  Fixtures   150.00 

Total    Assets    $77,376.17    $77,376.17 


58  CHATTEL  LOAN  BUSINESS. 

Liabilities. 

Capital    Stock    $54,200.00 

Bills  Payable   5,000.00 

Unearned  Interest  Account  11,502.29 

Tax,  Fees  and  Insurance  Account 1,350.00 

Undivided    Profits    2,613.88 

Undivided    Profits,   Dividend    for    1907,  payable 

Feb.  1,  1908    2,710. 00 


Total  Liabilities   $77,376.17    $77,376.17 

Loans. 

During  the   year   1907   loans   were   made   to   2579   persons   divided 
among  the  following  classes: 

Mechanics  and  laborers    775 

Clerks,  salesmen  and  solicitors   731 

Ry.  and  St.  Ry.  employees 247 

City,  county  and  U.  S.  Gov.  employees 148 

Merchants  and  contractors    284 

Property   owners 44 

Professional   people    60 

Boarding  house  keepers   88 

Female  clerks  and  saleswomen 127 

Seamstresses 75 

Total 2579 


APPENDIX   X. 
Report  of  the  Workingmen's  Loan  Association  of  Boston. 
Income  Account,  March  31st,  1908. 

Interest. $24,499  58 

Profit  and  Loss 5,797  95 

Collected  on  old  accounts  charged  off 261  74 

General  Expenses $15,155  66 

Interest,  National  Shawmut  Bank 407  11 

Interest,  Mass.  Hospital  Life  Ins.  Co 1,250  00 

State  Tax 2,341  62 

Dividend,  No.  38,  Oct,  15,  1907 3,750  00 

Dividend,  No.  39,  April  15,  1908 3,750  00 

Charged  for  bad  accounts 786  69 

Surplus  for  year 3,932  41 

$30,966  38    $30,966  38 


Trial,  Balance,  March  31st,  1908. 
Assets. 

Loans $215,826  64 

Cash 13,555  88        $229,382  52 

Liabilities. 

Capital  Stock ...  $125,000  00 

Notes  Payable  : 

Hospital  Life  Ins.  Co 25,000  00 

Dividend  No.  39 3,750  00 

RiskFund 4,50172 

Undivided  Profits 4,122  92 

Guaranty  Fund,  March,  1907 $63,075  47 

Surplus  for  year  1907-1908 3,932  41  67,007  88 


$229,382  52        $229,382  52 


6o 


APPENDICES. 


Mr.  George  W.  Manson,  an  accountant  selected  by  the  Savings  Bank 
Commissioners,  examined  the  books  and  accounts  of  the  Company  on  Oct. 
31,  1907.  He  reported  that  the  books  were  found  to  be  correctly  kept,  the 
cash  fully  accounted  for  and  the  accounts  of  the  Company  in  a  proper 
condition. 


No.  Loans 
Made. 

Interest. 

Principal 
Received. 

Amount 
Loans  Made. 

1907. 

May 

June 

July 

August 

September 

October 

November  . . . 

December 

1908. 

January  

February  

March 

169 
156 
170 
167 
184 
172 
190 
184 
206 

205 
169 
190 

$2,053  10 

2.094  15 
1,949  56 
2,237  38 
1,873  77 
2,082  81 

2.095  37 
1,833  93 
1,920  98 

2,047  98 
2,082  21 
2,228  34 

$15,758  90 
16,084  24 
13,367  04 
15,147  22 
13,626  93 
14,135  91 
16,504  46 
12,231  75 
12,514  07 

13,309  43 
13,481  58 

14,752  42 

$14,839  83 
15,451  30 
12,989  82 
12,862  53 
13,467  66 
14,137  36 
18,180  49 
14,613  08 
17,411  52 

15,924  48 
15,849  09 
17,409  24 

Totals 

2,162 

$24,499  58 

$170,913  95 

$183,136  40 

Outstanding  Loans. 


Number. 

Total  Amount. 

Average  Amount. 

3,585 

$215,826  64 

$60  20 

Rate  of  interest  charged  borrowers,  \%  per  month. 


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